LifeStrategy 20/80
Vanguard LifeStrategy Income Fund (LifeStrategy 20/80, VASIX)
Where it stands today
Our calculation, 1926-07 – 2026-09
Growth of $10,000
Where it came from
The LifeStrategy funds are Vanguard's fixed-formula funds of funds: each holds a few Vanguard index funds in set proportions. The Income Fund, the most conservative of the four, started on 30 September 1994 and, per the September 2026 fact sheet, seeks current income and some capital appreciation. In 2026 its fact sheet gives it a benchmark called the Income Composite Index.
Its target is about 80 % bonds and 20 % stocks. The fact sheet of 30 September 2026 gives the targets for the underlying funds: Total Bond Market II Index 56 %, Total International Bond Index (or Index II) 24 %, Total Stock Market Index 12 % and Total International Stock Index 8 %. The foreign bonds are hedged to the US dollar. Stocks are therefore 20 % of the fund: 12 % US and 8 % foreign.
The mix has changed over time. In the prospectus dated February 2008 the fund held 50 % Total Bond Market, 25 % Asset Allocation Fund, 20 % Short-Term Investment-Grade and 5 % Total Stock Market and described itself as about 60 % bonds, 20 % short-term fixed income and 20 % stocks, with stocks almost all US. The benchmark history on the 2026 fact sheet says the bond share was 60 % aggregate plus 20 % 1-3 year credit until 2011-2013, then 80 % aggregate; hedged international bonds (16 %) and international stocks (6 %) arrived on 3 June 2013; the current 24 % / 8 % international shares and 12 % US stocks took effect on 1 July 2015.
The fund is designed for investors with a short horizon or low tolerance for loss. It is the lowest-risk member of the series: lower stock share than the existing models m_vg_conservative (41 % stocks), m_vg_moderate (60 %) and m_vg_growth (80 %).
What is in it
| Vanguard Total Bond Market II Index Fund (US investment-grade bonds) | 56% | target on the 30 Sep 2026 fact sheet; actual holding on that date 55.3 % |
| Vanguard Total International Bond Index / Index II Fund (hedged to USD) | 24% | actual 23.3 % |
| Vanguard Total Stock Market Index Fund (US stocks) | 12% | actual 12.6 % |
| Vanguard Total International Stock Index Fund | 8% | actual 8.8 % |
How we model it
| US bond market (aggregate) | 80% |
| US large companies (S&P 500) | 11% |
| Developed markets outside the US | 6% |
| Emerging markets | 2% |
| US small companies | 1% |
For a euro investor
How to build it with European funds
| Part | Share | Example funds (ISIN) |
|---|---|---|
| US bond market (aggregate) (closest match) | 80% | iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) IE00BDBRDM35iShares Core Global Aggregate Bond UCITS ETF USD (Dist) IE00B3F81409 |
| US large companies (S&P 500) | 11% | iShares Core S&P 500 UCITS ETF USD (Acc) IE00B5BMR087Vanguard S&P 500 UCITS ETF (USD) Distributing IE00B3XXRP09 |
| Developed markets outside the US (closest match) | 6% | iShares Core MSCI Europe UCITS ETF EUR (Acc) IE00B4K48X80iShares Core MSCI Japan IMI UCITS ETF IE00B4L5YX21 |
| Emerging markets | 2% | iShares Core MSCI Emerging Markets IMI UCITS ETF (Acc) IE00BKM4GZ66 |
| US small companies | 1% | SPDR Russell 2000 U.S. Small Cap UCITS ETF IE00BJ38QD84iShares MSCI USA Small Cap ESG Enhanced CTB UCITS ETF USD (Acc) IE00B3VWM098 |
The idea
Keep losses small and provide income: most of the money is in diversified investment-grade bonds and a small stock share adds growth to protect buying power. The fixed formula removes the need to choose.
How people buy it
The fund itself (VASIX) or its ETFs-equivalent mix: BND 56 %, BNDX 24 %, VTI 12 %, VXUS 8 %.
Rebalancing as published
It is a fixed-formula fund that keeps the underlying funds near their targets; the exact trading rule is not stated in the fact sheet (actual holdings on 30 Sep 2026 were within about 1.3 percentage points of target).
Variants
- Vanguard LifeStrategy Conservative Growth 40/60, Moderate Growth 60/40 and Growth 80/20 (m_vg_conservative, m_vg_moderate, m_vg_growth).
- Before 2013 the fund had no international bonds and held a 20 % short-term sleeve instead (see origin).
- Vanguard Target Retirement Income (m_trincome) is a similar but different glide-path product.
Criticism
- Heavy interest-rate exposure: in 2022 stocks and bonds fell together and the fund lost 13.93 %, its worst year in the 2016-2025 table.
- Ten-year return to September 2026 was only 3.46 % a year.
- Bond share is 80 % and includes 24 % in hedged foreign bonds, which many US investors consider unnecessary.
Through the eras
| Era | Dates | Total | Per year | Worst drop | S&P 500 |
|---|---|---|---|---|---|
| Roaring Twenties boom | 1926-07 – 1929-08 | +34.2 % | +9.7 % | −1.0 % | +153.7 % |
| Wall Street crash and Great Contraction | 1929-09 – 1932-07 | −17.2 % | −6.3 % | −21.4 % | −78.2 % |
| New Deal recovery | 1932-08 – 1937-02 | +58.7 % | +10.6 % | −5.0 % | +268.7 % |
| Recession within the Depression | 1937-03 – 1938-03 | −8.4 % | −7.7 % | −8.6 % | −49.5 % |
| Rearmament and World War II | 1938-04 – 1945-09 | +49.8 % | +5.5 % | −5.4 % | +205.8 % |
| Postwar expansion | 1945-10 – 1965-12 | +154.5 % | +4.7 % | −4.6 % | +1212.9 % |
| Golden age of the 1950s | 1950-01 – 1959-12 | +59.1 % | +4.8 % | −4.6 % | +438.8 % |
| Go-go years and nifty-fifty | 1966-01 – 1968-12 | +11.2 % | +3.6 % | −5.1 % | +34.0 % |
| The Great Inflation (stagflation) | 1969-01 – 1982-07 | +101.2 % | +5.3 % | −11.7 % | +84.6 % |
| 1973-74 oil shock and bear market | 1973-01 – 1974-12 | −3.6 % | −1.8 % | −10.0 % | −41.7 % |
| Second oil shock and the Volcker disinflation | 1979-01 – 1982-08 | +32.1 % | +7.9 % | −11.7 % | +59.2 % |
| Great bull market in stocks and bonds | 1982-08 – 1999-12 | +650.7 % | +12.3 % | −7.9 % | +2060.4 % |
| Black Monday | 1987-08 – 1987-12 | −3.4 % | — | −6.3 % | −21.8 % |
| Savings-and-loan crisis and 1990 recession | 1990-07 – 1991-03 | +7.7 % | — | −4.0 % | +7.4 % |
| 1994 bond market massacre | 1994-02 – 1994-12 | −3.8 % | — | −5.0 % | −3.2 % |
| Asian and Russian financial crises | 1997-07 – 1998-10 | +12.8 % | +9.5 % | −1.8 % | +22.4 % |
| Dot-com bubble and crash | 2000-03 – 2002-10 | +11.6 % | +4.2 % | −2.5 % | −37.2 % |
| Recovery and housing boom | 2002-11 – 2007-09 | +42.3 % | +7.4 % | −3.0 % | +97.0 % |
| Global financial crisis | 2007-10 – 2009-03 | −3.5 % | −2.3 % | −10.0 % | −44.7 % |
| The decade after the crisis | 2009-04 – 2019-12 | +87.8 % | +6.0 % | −3.0 % | +411.2 % |
| Fourth-quarter 2018 sell-off | 2018-09 – 2018-12 | −1.7 % | — | −2.7 % | −14.4 % |
| Covid crash and stimulus boom | 2020-02 – 2021-12 | +10.8 % | +5.5 % | −3.3 % | +53.6 % |
| Inflation shock and rate hikes | 2022-01 – 2022-12 | −14.0 % | −14.0 % | −16.6 % | −19.9 % |
Calendar years
Any N-year period
| Any N-year period | Worst | 10 % worse than | Median | 10 % better than | Best |
|---|---|---|---|---|---|
| 1 y (1192) | −16.5 % | −1.3 % | +5.9 % | +13.0 % | +42.8 % |
| 3 y (1168) | −6.5 % | +1.8 % | +5.6 % | +10.9 % | +24.6 % |
| 5 y (1144) | −0.5 % | +2.6 % | +5.5 % | +10.3 % | +23.2 % |
| 10 y (1084) | +2.3 % | +3.9 % | +5.2 % | +11.5 % | +16.0 % |
| 15 y (1024) | +3.4 % | +4.1 % | +5.2 % | +11.2 % | +13.5 % |
| 20 y (964) | +3.5 % | +4.4 % | +5.3 % | +10.6 % | +12.1 % |
| 30 y (844) | +4.0 % | +4.5 % | +6.7 % | +9.5 % | +10.0 % |
How it behaved in history
- 2000-2002 (dot-com bear market). Earlier version of the fund (about 60 % bonds, 20 % short-term, 20 % stocks): +8.06 % in 2000, +4.06 % in 2001, +0.12 % in 2002; worst quarter -2.49 % in Q3 2002. www.sec.gov
- 2008-2009 (financial crisis). Calendar returns for 2008 were not obtained from a document read.
- 2022 (stocks and bonds fall together). -13.93 % for the year (benchmark -13.66 %): the sharp rise in rates hit the large bond share. workplace.vanguard.com
- 2013 and 2015 (re-allocation). Hedged international bonds and international stocks were added in June 2013 and the stock share was moved to 12 % US plus 8 % foreign on 1 July 2015, per the benchmark history in the fact sheet. workplace.vanguard.com
Published results (by others)
- Calendar-year returns 2016-2025 (2016-2025): 4.58, 6.98, -1.05, 12.05, 9.13, 1.92, -13.93, 9.48, 4.66, 9.42 % workplace.vanguard.com
- Total returns to 30 Sep 2026 (to 2026-09-30): 1 year 2.00 %, 3 years 7.42 %, 5 years 1.89 %, 10 years 3.46 % (benchmark 2.25, 7.58, 2.09, 3.69) workplace.vanguard.com
- Calendar-year returns 1998-2007 (earlier, more equity-light structure) (1998-2007): 13.17, 2.82, 8.06, 4.06, 0.12, 10.77, 6.01, 3.23, 7.93, 6.70 % www.sec.gov
- Best and worst quarters 1998-2007 (1998-2007): best +6.20 % (Q2 2003); worst -2.49 % (Q3 2002) www.sec.gov
- Growth of $10,000 from 31 Dec 2015 to 31 Dec 2025 (2015-2025): $14,888 (benchmark $15,210) workplace.vanguard.com
What we could not verify
- Exact rebalancing rule of the fund (not in the fact sheet).
- 2008 calendar-year return and other crisis numbers for the Income Fund were not retrieved.
- The split of the 12 % US stocks (large/small) and 8 % foreign stocks (developed/emerging) is our approximation, as in the other three LifeStrategy files.
- Earlier weights (before July 2015) are described through the benchmark footnote; the fund's own target splits for 2008-2013 beyond the 2008 prospectus were not checked.
Sources
- workplace.vanguard.com
https://workplace.vanguard.com/assets/corp/fund_communications/pdf_publish/us-products/fact-sheet/F0723.pdf - www.sec.gov
https://www.sec.gov/Archives/edgar/data/0000736054/000093247108000728/starfunds485b022008.txt - investor.vanguard.com
https://investor.vanguard.com/mutual-funds/lifestrategy - www.sec.gov
https://www.sec.gov/Archives/edgar/data/736054/000093247115006551/starfunds_final.htm - www.bogleheads.org
https://www.bogleheads.org/wiki/Vanguard_LifeStrategy_funds
Calculated on historical data. Past results do not predict the future. Models before the 1990s use stand-ins for classes that had no index yet; fees, taxes and fund costs are not included. This is mathematics, not an investment recommendation.