Bogleheads and Vanguard Annual Chart – August 2025 End of Month Update

Bogleheads and Vanguard

Slack Investor has paid tribute to the contribution that Jack Bogle has made to the investing world. He started Vanguard Investments in 1974. Bogle’s philosophy wasn’t about trying to beat the index and charging high costs – instead, he would offer a low-cost alternative fund based on the US index. Mr Bogle’s pioneering work with these low-cost funds has led to the popular low-cost Exchange Traded Funds (ETF’s) that proliferate today. Astonishingly, there are now more ETF’s listed in the US (4300) than actual companies (4200).

Slack Investor can well remember the days when a fund manager would charge you 4% of your capital for entry and then lift a further 2-3% in annual fees for the privilege of investing your money – that was not the ‘good old days’.

‘Bogleheads’ are a group of mainly US followers of Jack Bogle’s philosophy and they strive for long-term growth through low-cost, diversified index funds while minimizing fees. They are generally ‘Buy and Hold’ investors. One of their strategies is the three-fund portfolio – where investing is simplified into three low-cost funds – one for the local share market, one for international shares and one for bonds. For the US, the conservative recommended proportions are, your age defines the % in Bonds and the remainder percentage is split so that roughly 20% is in international equities.

In Australia, such a portfolio is a little more complicated as you need to cover yourself for currency risk – and hedge your international exposure for any fluctuations in the Australian dollar. Exposure to emerging markets is also recommended as a diversifier of risk. A Bogleheads type of portfolio is possible using 5 Vanguard funds.

AUD based equities	VAS  (MER: 0.07%)	(Australian equities)
	VGAD  (MER: 0.21%)	(Developed world ex-Australia equities – hedged to AUD)
Non-AUD based equities	VGS  (MER: 0.18%)	(Developed world ex-Australia equities)
	VGE  (MER: 0.48%)	(Emerging Markets)
Bonds	VAF  (MER: 0.10%)	(Aggregate bond fund)

Slack Investor can see the attraction that Bogleheads have in passive investing and, when he loses his mojo, will opt for a more simplified Boglehead-approved passive exposure to growth and cash/bond assets. Stockspot also offer diversified portfolios using just 5 ETF’s – with excellent performance so far.

Vanguard Financial Year Total Returns for major asset classes

Every August, Vanguard produces a summary brochure focusing on the last 30 years of finance data. It is a reminder that the top performing asset class for each year (green) is seldom the top performer the year after. A lesson in diversification.

Vanguard Annual Chart

It is now time for Slack Investor’s favourite chart – a succinct demonstration of long-term investing. The essence of successful investing is to be invested at least somewhere in appreciating assets – and then, let time do its work. Below is an extract from the Vanguard 2025 long-term investing chart. The numbers on the right are the results of investing $10,000 in the Index funds of the indicated asset classes for 30 years.

August 2025 – End of Month Update

Slack Investor is IN for Australian index shares, the US Index S&P 500 and the FTSE 100.

The S&P 500 (+1.9%) continues its progress. Slack Investor is pleased to go with the flow but remains nervous for the US markets. For the ASX 200 (+2.6%) and the FTSE 100 (+0.6%), also some monthly gains.

The latest reporting season has brought a few shocks to the Slack Portfolio. Big falls in Botanix (BOT), Telix Pharma (TLX), and CSL. Not so worried about CSL, but looking to reduce holdings in the less established companies (BOT, TLX) when things settle down. Next blog, Slack investor will go into detail how he is dealing with a few sudden drops in individual stocks.

All Index pages and charts have been updated to reflect the monthly changes – (ASX Index, UK Index, US Index).