Vanguard Funds

I visited the Vanguard website. Here are the performance of their funds, measured in USD:

                          1 yr   Expense  Industry
                        return    ratio    average
Prime Money Market       5.22%    0.29%
Short Term Inv Grade     5.73%    0.21%     0.97%
Total Bond Market        6.07%    0.20%     1.02%
Balanced Indexed        14.44%    0.20%     1.10%
Total Stockmarket Ind   20.20%    0.19%     1.14%
Diversifed Stock        20.19%    0.43%     1.14%
Total International St  29.42%    0.32%     1.49%

Vanguard advertised that they have low expense ratio, ie low cost funds. Most of their funds are invested to follow an index. The other funds in the industry are mostly actively managed.

The difference in expense ratio is about 0.8% for one year. If you invest in an actively managed fund, you need to find a manager who is able to earn higher than the market average to cover the higher expense ratio. This is usually quite difficult.

Lesson: Invest in a low cost, well diversified fund.