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Old 08-24-2008, 04:43 PM   #21
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Psssst - Yield 4.81%.

I'm not eating any of my seed corn so far, just harvesting the dividends...
If it's down 3.62% YTD doesn't that take into consideration the yield..I thought YTD figures assumed reinvestment of all dividends and capital gains..Am I wrong?
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Old 08-24-2008, 04:54 PM   #22
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If it's down 3.62% YTD doesn't that take into consideration the yield..I thought YTD figures assumed reinvestment of all dividends and capital gains..Am I wrong?
The change in the NAV is -5.91% so if you have been withdrawing dividends that is what the residual value would have dropped.
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Old 08-24-2008, 05:06 PM   #23
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If it's down 3.62% YTD doesn't that take into consideration the yield..I thought YTD figures assumed reinvestment of all dividends and capital gains.
Correct. The YTD return for Wellesley includes the reinvested dividend amount reflected in the yield number. One "apples and oranges" note - the yield is an annualized, not a YTD amount, defined by Vanguard as:

Yield. A snapshot of interest and dividend income from your holding. The yield, expressed as a percentage of the fund's net asset value, is based on income earned over a specified period and is annualized, or projected, for the coming year.
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Old 08-24-2008, 08:16 PM   #24
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Here's a quote from the prospectus:
Which also managed to avoid answering both of the questions...
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Old 08-24-2008, 08:30 PM   #25
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Is it cheaper than an annuity? Well the ER is .57-.58ish and you get to keep your principal. For that you're maybe paying an extra .3% for someone else to peanut butter your money across about 9 asset classes, rebalance for you and sell assets/cut you a check once a month.

Considering some folks are spending 1% ER for a fund that they cant explain the content of or why they own it with actual data that shows it does what its supposed to do, I guess thats a pretty spectacular deal.

Its not exactly dividend investing, its more like endowment investing. You could do this yourself but some of the parts have front end purchase loads, very high investment requirements (100k+ minimum or institutional level mins) or would require that you cobble together a handful of funds, some ETF's and a few other odds and ends.

Read the Harvard endowment fund managers annual letter to John Harvard. Pretty much covers the contents, strategy and results. The 2008 version should be along shortly.
http://www.hmc.harvard.edu/pdf/johnh...7-%20final.pdf

So far the vanguard funds havent yet invested in commodities, real estate, absolute returns or foreign bonds. I imagine those are coming when they feel an entry point is appropriate. Over the last few months I certainly havent missed them as they've fallen off a cliff.
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Old 08-24-2008, 08:31 PM   #26
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The Vanguard blurb on the managed payout funds. With a calculator.

New to me, I don't know anything about them.

https://personal.vanguard.com/us/fun...agedPayoutList
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Old 08-25-2008, 09:05 AM   #27
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In "theory" they will work, "reality" is often different. If the current market conditions persist over time, I see "supplements to the prospectus" coming out shaving the payout rates downwards a bit.......
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Old 08-25-2008, 10:44 AM   #28
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They made a change to the prospectus. So far their fancy new web site is choking when I try to view it. Might just be punctuation.
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Old 08-25-2008, 11:26 AM   #29
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They made a change to the prospectus. So far their fancy new web site is choking when I try to view it. Might just be punctuation.
Interesting that their web site chokes on a prospectus change..........
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Old 08-26-2008, 12:37 PM   #30
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I figured it out, sort of. Seems that PDF's are working fine from vanguard to internet exploder, but they wont work to firefox. The MP prospectus hangs in the same place every time, around 257k.

Regardless, I cant look at a 90 page document and see what, if anything significant, that they changed.
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Old 01-13-2009, 05:41 PM   #31
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How are these puppies doing?
When will they re-calibrate the monthly distributions?
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Old 01-13-2009, 06:02 PM   #32
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I wouldn't be surprised if they are withering on the vine. Definitely not designed for a down market early after purchase.
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Old 01-13-2009, 10:28 PM   #33
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There was a WSJ article. Some of them with 2010 target date have lost 38% in 2008, worse than the S&P. One was an Oppenheimer fund with 40% bonds but that segment used some kind of derivatives with bonds.
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Old 01-14-2009, 09:17 AM   #34
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I wouldn't be surprised if they are withering on the vine. Definitely not designed for a down market early after purchase.
Typical Wall Street "wizardry". Come out with a product to combat defined benefit pensions going bye-bye, and launch them right before the worst market in 20+ years..........
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Old 01-14-2009, 12:23 PM   #35
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Typical Wall Street "wizardry". Come out with a product to combat defined benefit pensions going bye-bye, and launch them right before the worst market in 20+ years.
Yup.

Their problem is not that they will run out of money, but rather that all their marketing is based on their "advertised" payouts of, I believe, 3, 5, and 7% for the various flavors. At that rate in this recession they are doomed to have a lot of unhappy investors.

Then again, those same investors took a leap and probably wouldn't have done better anywhere else.
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Old 01-14-2009, 12:27 PM   #36
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The open question remains whether or not the bad timing of the introduction of these products will ultimately kill them in the marketplace.
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Old 01-14-2009, 12:36 PM   #37
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The open question remains whether or not the bad timing of the introduction of these products will ultimately kill them in the marketplace.
They are stuck for current investors. They can always issue a supplement to their prospectus that gives them the right to lower the guaranteed payout if the market is terrible...........
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Old 01-14-2009, 02:01 PM   #38
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They are stuck for current investors. They can always issue a supplement to their prospectus that gives them the right to lower the guaranteed payout if the market is terrible...........
Or, just keep paying the 3%, 5%, and 7% and erode the NAV of the funds. Some closed-end funds have done this. They could keep making the stated payout as the NAV becomes asymptotic to zero. "Just like clockwork, the checks keep coming. Here it is the year 2015 and I got 7% of my entire balance of 92 cents."

Vanguard should not have gotten into this business. I wonder what Bogle said about this?
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Old 01-14-2009, 03:11 PM   #39
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Of course, if the markets were up then we'd all be talking about how great these funds are.

I don't see much difference between a managed payout fund and a retired person with normal AA who uses Firecalc to project how much he can take out of his portfolio. What am I missing?
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Old 01-14-2009, 03:50 PM   #40
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What am I missing?
The MPFs implied a commitment to distributing anywhere from 3 to 7% a year with annuity-like reliability. The solo investor hopefully makes no such assumptions in hard times.

But everything looks better in bull market.
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