Numerically Quantified Diversification II

Yesterday we reported our first real case study result using Vanguard 500 Index Fund as the base fund. That was based on the assumption that some of the growth-orientated investors like to have this fund as their anchor fund.

For some other investors, they may like to have growth and income at the same time. We assume that these investors may use Vanguard Wellesley Income Fund as the anchor fund. For these investors, their diversification needs are different. The results posted here today are for the estimated ranking based our modeling efforts.

The ranking of diversification benefits of the 50 funds based on the Vanguard Wellesley Income Fund are listed below. We list them from the least diversification fund to the highest diversification fund. The difference between the two rankings (today versus yesterday) is clear.

Life Strategy Income Fund
Life Strategy Conservative Growth Fund
Long-Term Investment-Grade Fund
Long-Term Bond Index Fund
Long-Term Treasury Fund
Wellington Fund
Intermediate-Term Bond Index Fund
Intermediate-Term Investment-Grade Fund
Total Bond Market Index Fund
STAR Fund
GNMA Fund
Intermediate-Term Treasury Fund
Short-Term Investment-Grade Fund
Short-Term Bond Index Fund
Balanced Index Fund
Life Strategy Moderate Growth
High-Yield Corporate Fund
Asset Allocation Fund
Equity Income Fund
Windsor II Fund
REIT Index Fund
Life Strategy Growth Fund
Selected Value Fund
Global Equity Fund
Health Care Fund
Dividend Growth Fund
Convertible Securities Fund
Windsor Fund
Value Index Fund
International Value Fund
Strategic Equity Fund
Small-Cap Index Fund
Total Stock Market Index Fund
European Stock Index Fund
International Growth Fund
Growth and Income Fund
500 Index Fund
Total International Stock Index Fund
Extended Market Index Fund
Morgan Growth Fund
Explorer Fund
Energy Fund
Growth Index Fund
PRIMECAP Fund
US Growth Fund
Precious Metals and Mining Fund
Emerging Markets Stock Index Fund
Growth Equity Fund
Capital Opportunity Fund
International Explorer Fund