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Please help me understand Wellesley performance data
Old 01-03-2009, 08:19 PM   #1
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Please help me understand Wellesley performance data

I apologize in advance for this very basic question. I'm pretty new to investing and want to make sure that I'm understanding Vanguard's performance data correctly.

Here's what's showing on the Vanguard website for Wellesley for 2008:

1 year returns before taxes: -9.84%
1 year returns after taxes on distribs. & sale of fund shares: -5.77%
SEC yield: 5.78%

Share price at beginning of year: 21.09
Share price at end of year: 18.49

What I take this to mean is that if I invested $100 in Wellesley on the first of the year, and reinvested all dividends, I would currently be down by $9.84. That number should be the sum of what I've lost in share price (12.3% or $12.30) and what I've gained in dividends ($5.78). So why don't these numbers add up? This is why I think I'm misunderstanding something.

Any light that you could shed on this would be SO appreciated.
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Old 01-03-2009, 08:23 PM   #2
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Quote:
Originally Posted by emilylynn View Post
I apologize in advance for this very basic question. I'm pretty new to investing and want to make sure that I'm understanding Vanguard's performance data correctly.

Here's what's showing on the Vanguard website for Wellesley for 2008:

1 year returns before taxes: -9.84%
1 year returns after taxes on distribs. & sale of fund shares: -5.77%
SEC yield: 5.78%

Share price at beginning of year: 21.09
Share price at end of year: 18.49

What I take this to mean is that if I invested $100 in Wellesley on the first of the year, and reinvested all dividends, I would currently be down by $9.84. That number should be the sum of what I've lost in share price (12.3% or $12.30) and what I've gained in dividends ($5.78). So why don't these numbers add up? This is why I think I'm misunderstanding something.

Any light that you could shed on this would be SO appreciated.
The first thing I note is that you apply the 5.78% dividend yield to the initial $100 balance, but it came at different times and the *current* dividend yield is 5.78% based on the current NAV. When the NAV was $21.09 (and the total share value at $100) the yield was considerably lower. So you didn't get $5.78 in dividends -- you got less than that.
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Old 01-03-2009, 08:29 PM   #3
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What Ziggy said.

From the Vanguard website definition of terms:

  • 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.
IOW, yield is not a YTD figure but instead is a snapshot of the current dividend. It may have been higher or lower over the previous year.
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Old 01-03-2009, 08:32 PM   #4
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Thanks, guys. That makes perfect sense now that you point it out.
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Old 01-04-2009, 08:01 AM   #5
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Well, If i may suggest?
Go to the M* financial Message Boards and look for the Vanguard Board members
You can also go to the BoggleHeads site where there are several Hundred in there to explain things..

There is an Old but true saying.." If you don't understand what your investing in? Then Don't"... And It's best to Invest in something with 25% of what you were going to a few yrs beforehand and see how things go before Jumping in with Both Feet..

Put $10k in it and see how it all goes and over a few yrs, it will explain itself to you on a direct basis.. here's some links that you can go to:

M*Retirement Discussion Board
Vanguard Diehards Discussion Board
Bogleheads Investing Advice and Info

FYI? In the VWINX class of Conservative Bal. Funds? ( ave 40/60 mix )
Ck out ; HSTRX, GLRBX & PRPFXfunds..are much better IMO
and VWINX has Alittle Problem, It's Mgr has retired and How it will perform in the future remains to be seen..
I recommend to Put at least $10k in 2-3 Bal. Funds for a Few yrs and maintain having that many all the time..

> I have owned 4 Bal. Funds since 99'..a mix of Aggressive ( WMIRX), Moderate and Conservative ....but What I need in annual Income all in Bonds first..then the rest in Bal. Funds..( if Need $50k yr income by ave 6% bonds, requires Min. $800k )

My Bal. Funds Port. did about -16% loss this past yr, but the Bonds did +21% making me a total 5.6% for 08'. Past 9 yrs apy btwn them = 9.4% apy, down from 11.4% for previous 8 yrs..

All due to no credit to my Investing abilities, but to my Investment Firms Advice..

I bougth their office a new 62" TV for Xmass..and had Delievered Lunch Specials once a week for Dec. from their favorite Nearby Resturant for their Office staff.. :>)
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