The Vanguard LifeStrategy Growth Fund Top 4 Holdings

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When it comes to index funds, Vanguard has led the way from the very beginning. In 1976, it created the very first index mutual fund, the Vanguard 500 Index Fund (VFIAX). Ten years later, the group introduced the Vanguard Total Bond Market Index Fund (VBTLX).

Looking to innovate, Vanguard introduced an "index fund of index funds" with its LifeStrategy Funds. The funds are a series of broadly diversified, low-cost funds using total index funds as the foundation for creating different portfolio allocations based on risk objectives. Four underlying mutual funds comprise the Vanguard LifeStrategy Growth Fund (VASGX), which has $19.4 billion in assets as of April 27, 2021, and an expense ratio of 0.14%.

Key Takeaways

  • Vanguard is one of the leaders in index funds, including the index fund of index funds.
  • Vanguard launched the Vanguard LifeStrategy Growth Fund (VASGX) in 1994, which invests in four index funds.
  • The VASGX is invested heavily in stocks, with just over 80% invested in two stock funds, while 20% is invested in bond funds.

1. The Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX)

The Vanguard Total Stock Market Index Fund had the top position with a 48.6% weight as of April 2021. VTSAX has 3,745 holdings across $240.4 billion in AUM to track the performance of the CRSP US Total Market Index, which is composed of nearly 100% of the total market capitalization of the U.S. stock market.

The fund leans toward large-cap stocks, but it includes weightings across all capitalization based on the weightings of the underlying index. As of Q1 2021, the fund has returned an average annual return of around 8.3% since inception on Apr. 27, 1992, and an average of 14.2% over the past 10 years.

2. The Vanguard Total International Stock Index Fund Admiral Shares (VTIAX)

The Vanguard Total International Stock Index Fund has a heavy 32.30% weighting in the LifeStrategy Fund as of Q1 2021. VTIAX launched in 1996 and has $45.3 billion in assets invested in 7,443 stocks tracking the FTSE Global All Cap ex-US Index. The index looks to gain equity exposure from both developed and emerging markets.

The fund's top holdings include Alibaba Group (BABA), Tencent Holdings (TCEHY), and Taiwan Semiconductor Manufacturing (TSM). As of April 2021, over the last 10 years, the fund has returned an average annualized return of 5.25%, with an average 6.41% return since inception on Apr. 29, 1996.

3. The Vanguard Total Bond Market Index Fund Investor Shares (VBTLX)

The Vanguard Total Bond Market Index Fund had a 13.6% weighting as of Q1 2021. The fund has $73.5 billion in assets invested in bonds.

The fund is designed to track the performance and yield of the Bloomberg Barclays U.S. Aggregate Float Adjusted Index. As of April 2021, it returned an annual average of 3.39% over the previous 10 years, and 4.18% since inception on Dec. 11, 1986.

4. The Vanguard Total International Bond Index Fund Investor Shares (VTABX)

The Vanguard Total International Bond Index Fund Investor Shares had a 5.5% weighting as of Q12 2021. The fund provides investors with a low-cost way to gain exposure to international bonds. The fund's $40.8 billion in assets are invested to track the performance of the Bloomberg Barclays Global Aggregate ex-USD Float Adjusted RIC Capped Index.

The fund is heavily weighted toward government and government-related bonds from developed countries, but it has some exposure to emerging markets. The fund, which was launched on May 31, 2013, has an average annual return of 3.75% since inception. as of April 2021.

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