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I'm looking in Vanguard some balanced (stocks + bonds) index fund / ETF that tracks the S&P 500 but the only thing I've found is:

VFINX: https://investor.vanguard.com/mutual-funds/profile/VFINX

It's closed, and I can't find what exact index is it actually tracking.

Is there any ETF / Index Fund that tracks the S&P 500 and that holds both stocks and bonds?

  • What split would you want between S&P500 stocks and a bond index? – mhoran_psprep Sep 27 at 12:50
  • Where do you see that VFINX holds bonds? – D Stanley Sep 27 at 13:11
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    VFINX's ETF counterpart VOO is open. And the obvious solution to the S&P500+bonds problem is to own two funds: VOO and a bond fund. – RonJohn Sep 27 at 13:15
  • @DStanley You are right, I think I have posted the wrong fund by mistake. – Martel Sep 27 at 13:24
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Is there any ETF / Index Fund that tracks the S&P 500 and that holds both stocks and bonds?

No, because the S&P 500 does not contain any bonds, so trying to track that index with both stocks and bonds would be extremely difficult.

I assume you want the returns of the S&P 500 but not the risk, hence the addition of bonds. Unfortunately, risk and return is a trade-off.

It's a bit like saying "I want chocolate cake, but made with broccoli so it's more healthy." Trying to keep the flavor of chocolate cake with enough broccoli to make a difference in the nutrition would be quite difficult (though I imagine someone has tried it).

If you want less risk and are willing to give up some expected return for it, then invest in a combination of an S&P 500 fund and a diverse bond fund. There's no law that says you can only invest in one fund.

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I agree with what @D Stanley has already said. But would like to add a few points.

1) If you're just looking to add some bonds to your portfolio to balance out the risk Vangaurd does a total bond market fund that has a low MER VBMFX (MER 0.15%).

2) Deciding how much risk/reward you're willing to take on is a personal choice but will be informed by your risk tolerance, your age and the likelihood that you will need to remove your money early. Equities will always beat bonds over the long term so if you have the time to wait, are in a stable job, and no where near retirement then there's an argument to be made for 100% equities. Here's an article on how to decide your asset allocation.

3) If you like the idea of having some bonds in there but don't want the hassle of re-balancing your portfolio Vangaurd makes targeted retirement funds which gradually shift your balance of stocks to bonds based on the time you're planning on retiring. If you like the idea of the fund but want it to be a little more or less aggressive just adjust your foretasted date or retirement-- making it later will put a higher proportion of equities in your account, while making it sooner will increase the number of bonds. These funds do have the downside that they have a higher MER (because they involve more trading), but they are a good set it and forget it option.

4) If this seems overwhelming Betterment is an option. They're the only robo-advisor that I've seen that offers similar levels of return as VTSAX (though obviosuly at a lower rate than if you do it yourself since you're paying for their service). Personally, I think it's always best to manage these things yourself since if you're not confident in the investments you're making you probably shouldn't be investing. But they are an option that offers some neat services and let you set your level of risk-tolerance, etc...

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