1. Vanguard investors have a long-term risk outlook.

The typical Vanguard household holds a long-term, risk-taking portfolio that's both diversified and balanced. The average portfolio consists of 63% stocks, 16% bonds and 21% cash.

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2. Risk-taking differs among investors.

Equity risk ranges from conservative to aggressive for investors with otherwise similar asset levels or ages. At the extremes, 16% of households hold no equities, while 22% hold very risky portfolios containing at least 98% equities.

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3. Portfolios are becoming more index-oriented.

The proportion of households building portfolios with active investments is falling, consistent with a broader shift to passive strategies since the 2008 global financial crisis. Active investors tend to be older and longer-tenured Vanguard households, possibly because active strategies were more popular when those accounts were initially opened.

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4. Portfolios tend to favor domestic holdings.

Vanguard retail households invest about 19%, on average, of their long-term mutual fund and ETF assets internationally. This is less home bias than is commonly expected for retail investors, and owes in part to global holdings being held in domestically labeled equity funds and ETFs. Older and longer-tenured households tend to exhibit the most home bias, while advised households and those that use target-date funds exhibit the least.

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5. Households use a mix of investment products but favor mutual funds.

Four in five Vanguard households have assets invested in long-term mutual funds, down seven percentage points since 2015. During the same period, ETF use has doubled to 13% of households, matching the rate of individual securities. More than half of households have assets invested in money market funds.

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6. ETFs are used generally as a noncore holding.

Most households that currently invest in ETFs are “diversifiers,” meaning ETFs make up less than a quarter of their assets. Diversifier households tend to be wealthy and long tenured. However, a small but growing group of ETF “enthusiasts,” typically millennials who have been with Vanguard for only three years, build complete portfolios from ETFs.

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7. Individual securities are used in similar ways as ETFs.

Like ETF investors, the typical household that invests in individual securities is a diversifier, combining these with other diversified holdings. However, a small fraction of households allocate most or all of their portfolios to individual securities. The typical individual security enthusiast is nearly 20 years older than the typical ETF enthusiast, and tends to have smaller balances at Vanguard than the average household.

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8. Target-date funds are typically used as part of a broader portfolio.

Overall, about one in five households use TDFs, a number largely unchanged since 2015. Even though TDFs are designed as all-in-one retirement portfolios, most TDF-using households also hold other types of investments. Pure TDF investors — those who invest only in a single TDF — are almost exclusively from IRA-only households.

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9. Vanguard households trade infrequently.

Fewer than one-quarter of Vanguard households trade in any given year, and those that do typically only trade twice. Most traders’ behavior is consistent with rebalancing or is professionally advised. Traders are slightly older and longer tenured than non-traders, and they tend to have multiple account types and significantly greater assets.

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10. During a turbulent start to 2020, households stayed the course.

Twenty-two percent of households traded in the first half of 2020, a rate typical of trading for a full calendar year. But less than 1% of households abandoned equities completely during the downturn, while just over 1% traded to extremely aggressive portfolios. The net result was a modest reduction in the average household equity allocation, from 63% to 62%.

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11. Trading and product holdings are correlated.

Households with individual securities and ETFs are more than three times likelier to trade than Vanguard households overall. This reflects both restrictions on frequent trading in mutual funds and traders’ preferences to use vehicles that allow them to trade freely (and incur their own transaction costs).

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Related: Jeffrey Gundlach on Biden, Markets and Leaving California

Vanguard this week introduced a compendium of investor behavior that covers data from 2015 through 2019, as well as a quick look at investor reactions to the pandemic-related market downturn in the first quarter of 2020.

The report uses detailed data on the portfolio construction and trading behavior of Vanguard clients in some 5 million retail households.

The intention, Vanguard said, is to help investors benchmark their behavior with the end goal of giving them the best chance for investment success.

“Encouragingly, but not surprisingly, the report also reinforces our clients’ philosophical alignment with Vanguard’s long-term approach to investing,” Colin Kelton, Vanguard’s chief marketing officer, said in a statement.

“Their focus on goals, balance, cost and discipline — the core pillars of Vanguard’s investment principles—pays dividends in any market environment, but proves especially valuable in times of volatility like we’ve experienced this year.”

See the gallery above for 11 findings on how these 5 million households invest.

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