Comparing Lazy Portfolios

[ejman]

I happened to be looking at the results for the Lazy Portfolios in Marketwatch
Invest Simple with Lazy Portfolios - MarketWatch.com. It then occurred to me to compare these results to Wellesley and Wellington for 1,5, and 10 years. I assume the lazy portfolios include results thru 12/31/15 (I don't see beginning/ending dates) but in any event, as the market declined the last month of 2015, the comparison is probably meaningful even if the periods are not exactly the same.

Well, near as I can tell, W/W beat the crap out of practically all of the lazy portfolios for all periods. I know there is no value to active management but...

 

[razztazz]

Brief interjection if I may. I see Wellesley and Wellington mentioned in a lot of places but I have never owned them. What is it about them that makes them unique or special? What's their investment philosophy? I know they're not index funds

 

[hnzw_rui]

What is it about them that makes them unique or special?

Fairy dust.

 

[LOL!]

You may wish to read the madsinger threads at bogleheads where several lazy portfolios are compared every month. Here is a link to the latest one:
https://www.bogleheads.org/forum/viewtopic.php?f=10&t=181187

 

[ejman]

Brief interjection if I may. I see Wellesley and Wellington mentioned in a lot of places but I have never owned them. What is it about them that makes them unique or special? What's their investment philosophy? I know they're not index funds

They are both actively managed funds and they are roughly the inverse of each other. Wellesley is 35% equities 65% bonds and Wellington 65% equities and 35% bonds (although they do vary slightly over time). They have both been around for a long time (Wellington since 1929!). They both generally hold a value tilt and generate a fair amount of dividends and Capital Gains so may not be the best investment in a taxable account if one wishes to delay taxing of such distributions. I'm retired and live off dividends and CG distributions so thats a feature for me

 

[eta2020]

What is a ticker for it?

Because if I compare ones I know to king of lazy portfolios (S&P 500) starting from 1982 outperforms them hands down. That is visible on 10 year graphs but over a longer period starting at 1982 it is dramatic

I agree they are 5 star funds for what they do.....

 

[ejman]

What is a ticker for it?

Because if I compare ones I know to king of lazy portfolios (S&P 500) starting from 1982 outperforms them hands down. That is visible on 10 year graphs but over a longer period starting at 1982 it is dramatic

I agree they are 5 star funds for what they do.....

Well, the annualized S&P 500 return from the end of 1999 to end of 2015 (dividends reinvested) was about 4.2% per year. The annualized return for Wellesley (vwinx) for the same period was about 7.3%. Of course, this is a fun game to play. Pick different dates - get different results

 

[Texas Proud]

What is a ticker for it?

Because if I compare ones I know to king of lazy portfolios (S&P 500) starting from 1982 outperforms them hands down. That is visible on 10 year graphs but over a longer period starting at 1982 it is dramatic

I agree they are 5 star funds for what they do.....

S&P does not have any bond component to it... so the comparison is not vs similar investments....

 

[prose3589]

They are both actively managed funds and they are roughly the inverse of each other. Wellesley is 35% equities 65% bonds and Wellington 65% equities and 35% bonds (although they do vary slightly over time). They have both been around for a long time (Wellington since 1929!). They both generally hold a value tilt and generate a fair amount of dividends and Capital Gains so may not be the best investment in a taxable account if one wishes to delay taxing of such distributions. I'm retired and live off dividends and CG distributions so thats a feature for me

I recently moved about 50k cash to Wellington- mainly because I am not as educated as many on the forum. I felt comfortable with the allocation and the historical data. I wanted to "set it and forget it". Now I am worried as these funds are in a taxable account. It was my plan to move more funds over the next year as I receive them from real estate investment. Should I be looking at other funds that are more tax friendly

Sorry to hijack the thread.


Sent from my iPhone using Early Retirement Forum

 

[eta2020]

S&P does not have any bond component to it... so the comparison is not vs similar investments....

It is basic fundamental example of extremely lazy portfolio with very easy access to data...hence my pick of lazy portfolio. Usually people here say 80/20 will give you same result as 100% equities .

So yea if you pick end of 2009 you will make out a bit better return but anything else on period X - 2015 where X is 1982 S&P will win hands down.

 

[papadad111]

Do Wellington and Wellesley have ETF equivalents that hold the mutual fund ... Such that one could buy without going to vanguard directly ?

Similar to Vanguard total market, vanguard total international , have that VTI and VXUS and Vanguard total bond BND

 

[ejman]

I recently moved about 50k cash to Wellington- mainly because I am not as educated as many on the forum. I felt comfortable with the allocation and the historical data. I wanted to "set it and forget it". Now I am worried as these funds are in a taxable account. It was my plan to move more funds over the next year as I receive them from real estate investment. Should I be looking at other funds that are more tax friendly

Sorry to hijack the thread.


Sent from my iPhone using Early Retirement Forum

Well, if you wish to minimize taxable distributions I would have to say that Wellington might not be the best choice for you. Generally index funds will not generate much in the way of CG and will only distribute dividends. Growth index funds will generally have low dividends so those may be your best bet from that standpoint. BUT be prepared for a lot of volatility. If you are comfortable with your fund dropping an amount greater than the S&P 500 on a lousy day (such as yesterday) go for it.

 

[ejman]

It is basic fundamental example of extremely lazy portfolio with very easy access to data...hence my pick of lazy portfolio. Usually people here say 80/20 will give you same result as 100% equities .

So yea if you pick end of 2009 you will make out a bit better return but anything else on period X - 2015 where X is 1982 S&P will win hands down.

X=1982 is absolutely the best period you can possibly pick as the start point for the S&P 500. If you think that period will be repeated ad infinitum I have a bridge for sale...

 

[eta2020]

X=1982 is absolutely the best period you can possibly pick as the start point for the S&P 500. If you think that period will be repeated ad infinitum I have a bridge for sale...

That is what e-trade gives you when you click on max.

But other dates also will give you good results....they just compound over time so earlier you start on graph better it looks.

But I agree those years were very good for S&P BUT they were even better for bonds

 

[ejman]

That is what e-trade gives you when you click on max.

But other dates also will give you good results....they just compound over time so earlier you start on graph better it looks.

I'm not sure what you are getting at here. There is no doubt that over very, very long periods of time equities will deliver higher returns than bonds with much higher volatility. It should not come as a surprise to you, me or any one else that the S&P 500 should deliver higher returns than a balanced portfolio over 30 to 50 year periods because it incurs higher risks and volatility.

BUT if I had retired at age 60 on January 1st of 1929 Me thinks I would have rather been invested in Wellesley (If it had been available then) rather than Vanguards Index 500 fund (If it had been available then).

 

[eta2020]

I am just saying simple lazy portfolios will outperform even 5 start managed funds...just give them a time and do not let emotions drive you.

So I am here in agreement to what Senator does...Just buy S&P 500 and add and add and do not panic and you will do better then 90% of people. If I need a yield I will add SCHD and VIG......

Good night my friends.

 

[ejman]

I am just saying simple lazy portfolios will outperform even 5 start managed funds...just give them a time and do not let emotions drive you.

So I am here in agreement to what Senator does...Just buy S&P 500 and add and add and do not panic and you will do better then 90% of people. If I need a yield I will add SCHD and VIG......

Good night my friends.

Who's panicking? That's the beauty of well managed balanced funds... Good night. Sweet dreams

 

[Midpack]

I happened to be looking at the results for the Lazy Portfolios in Marketwatch
Invest Simple with Lazy Portfolios - MarketWatch.com. It then occurred to me to compare these results to Wellesley and Wellington for 1,5, and 10 years. I assume the lazy portfolios include results thru 12/31/15 (I don't see beginning/ending dates) but in any event, as the market declined the last month of 2015, the comparison is probably meaningful even if the periods are not exactly the same.

Well, near as I can tell, W/W beat the crap out of practically all of the lazy portfolios for all periods. I know there is no value to active management but...

If you click on each, they all say thru 1/5/2016.

 

[Senator]

Some of the dividends of Wellesley may be treated as non-qualified dividends, whereas the S&P is 100% qualified dividends.

 

[rodi]

Do Wellington and Wellesley have ETF equivalents that hold the mutual fund ... Such that one could buy without going to vanguard directly ?

Similar to Vanguard total market, vanguard total international , have that VTI and VXUS and Vanguard total bond BND

I don't think they do. They are not index funds, but rather actively managed...

But I could be wrong.

 

[growerVon]

Some portfolio pages suggest W/W can be used as very core holdings. For me, I prefer more equity diversification so don't plan to make either a significant percent of my allocation, though I do have Wellesley in my HSA. Both seem to have a great track record and are the rare example of a low-fee actively managed fund. Neither are considered tax-efficient for holding in a taxable account, if you can avoid it.