I think that is basically right.Unless the LifeStrategy funds are intended for some sort of use that is different than retirement income
Or more precisely--as far as I know, Vanguard's LifeStrategy funds date back to 1994. TIPS didn't even exist at the time.
Their Target funds were then first launched in 2003. TIPS existed, but still in a rudimentary way. The short-term TIPS fund they are using in their Target funds today didn't even exist until 2012, in fact.
DFA, who I referenced earlier, then started their Target funds in 2015, when TIPS were a much more mature investment product.
OK, so what exactly are the LifeStrategy funds anyway? I don't think most financial planning experts today would choose them as particularly suitable for retirement savers, given the available alternatives today. They are more throwbacks to a prior era when the top current options for retirement savers didn't even exist.
I guess Vanguard could have chosen to modify them more to be closer to current best practices thinking, but then as I pointed out, they are already potentially facing serious market size constraints on using TIPS in just their Target funds.
So it probably doesn't make much sense to use them in the LifeStrategy funds. Or maybe it is just a marketing thing. Or some of both.
Or, alternatively, when retirement is still 5 years away.I guess there is consistency in having no TIPS used when equity is higher than 60%.
Vanguard is only using a 0-5 ST TIPS fund in its Target funds. It does not make a lot of sense to use such a fund 5+ years from retirement.
Indeed, DFA has 58.61% TIPS in its Target 2030, but it is half LT TIPS, half market TIPS, no ST TIPS per se (other than the bits in the market fund). Which makes more sense when retirement is 5+ year away.
So really, Vanguard could be seen as just deciding not to use anything but ST TIPS--whatever reasons it might have for that--in its Target funds.
Statistics: Posted by NiceUnparticularMan — Thu Sep 04, 2025 10:14 am — Replies 11 — Views 803