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View Poll Results: Has Your Portfolio Outperformed These Over the Short & Long Term?
Outperformed Wellington 11 23.40%
Outperformed Wellesley 18 38.30%
Underperformed Wellesley 18 38.30%
Voters: 47. You may not vote on this poll

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Poll: Does Your AA Outperform Wellington and/or Wellesley?
Old 01-05-2015, 11:49 AM   #1
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Poll: Does Your AA Outperform Wellington and/or Wellesley?

Based on the recent 2014 returns thread, many (self included) might be interested in the short and long term returns of the two Vanguard Funds.

I have always planned to simplify my AA, maybe I'll consider sooner rather than later...

PeriodWellesleyWellington
1 yr8.07%9.82%
3 yr9.10%13.94%
5 yr9.51%11.25%
10 yr7.20%7.97%
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Old 01-05-2015, 12:01 PM   #2
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I think Wellesley is an excellent fund. I keep 30% in Wellesley, because I would never put more than 30% in any one actively managed fund.

In another thread you mentioned,
Quote:
Originally Posted by Midpack View Post
Real rookie mistake, chasing returns (though duration was my MO), time will tell...
So, I would suggest making sure that you are not chasing yield this time too. But gosh, I can't fault anyone who might want to invest up to 30% in Wellesley. It has been "the apple of my eye", so to speak, for many years.
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Old 01-05-2015, 12:01 PM   #3
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I don't have 10 year numbers handy, only five year totals. But for these five, I've outperformed Wellington. Not by much, and I've had much more volatility and risk. That's why I'm also gradually simplifying things.
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Old 01-05-2015, 12:03 PM   #4
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My benchmark did not for the last year, but I'm not sure about 3/5/10 years. The 6% I hold in cash now that I'm retired is a minor drag. I have also thought about how to integrate Wellesley or Wellington into my portfolio without reducing tax efficiency, but as I keep doing Roth conversion and our Roths grow to become a larger part of the whole it may become viable.


Edited to add: I went back and looked at actual returns and I did outperform them for 3 and 5 years. Not sure about 10 years as my data is a bit suspect going that far back. That makes me feel better.
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Old 01-05-2015, 12:04 PM   #5
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Where do you draw the line, though? We have about 1/3 of our investments divided between Wellington and one other mutual fund that I trust just as much, and has performed better than Wellington in the 3 yr, 5 yr and 10 yr periods - Wellington chosen because I'm too uncertain to pick my own bond positions and the other mutual fund chosen because I'm too uncertain to pick my own international positions. Do we just put it all in this other mutual fund because except for the short term it is "better" than Wellington or Wellesley?

I sure wish I could put the rest into those funds but unfortunately most of the rest of our investments are in current employer 401(k)s.
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Old 01-05-2015, 12:04 PM   #6
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I have recently transferred a fair chunk to these two. They seem a good bet for "set it and forget it". My previous Year's return on my AA was midway between these two but with quite a bit more risk.
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Old 01-05-2015, 12:50 PM   #7
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What time period

I am over for all years Wellesley...

I am a bit below for 1 year and 10 year.... but way over for 3 and 5 vs Wellington... but, this is only my Vanguard holdings (which is the big majority)....
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Old 01-05-2015, 01:00 PM   #8
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I suppose I have to say no, since for the past several years my AA has been 1/3 Wellesley, 1/3 Wellington, 1/3 in short term bonds and PenFed CD's.
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Old 01-05-2015, 01:02 PM   #9
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I guess the real question is would a 60% S&P index and a 40% total Bond come up about he same or a little better. Most people who underperformed Wellesly had substantial international holdings - duh.
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Old 01-05-2015, 01:22 PM   #10
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Most people who underperformed Wellesly had substantial international holdings - duh.
People like me. But I was also taking on less risk, since I was more diversified. So adjusting returns for risk level might paint a different picture.
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Old 01-05-2015, 01:46 PM   #11
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No for 1 year for either. Yes for 5 and 10 year. But I'd like to also see standard deviation compared - in other words, regardless of whether I outperformed or underperformed, was my ride smoother?
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Old 01-05-2015, 01:57 PM   #12
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Quote:
Originally Posted by big-papa View Post
No for 1 year for either. Yes for 5 and 10 year. But I'd like to also see standard deviation compared - in other words, regardless of whether I outperformed or underperformed, was my ride smoother?
Certainly worth knowing. Comparing beta's might be easiest.

PeriodWellesleyWellington
1 yr.62.87
3 yr.52.89
5 yr.47.97
10 yr.57.99

Quote:
Calculating your portfolio's beta will give you a measure of its overall market risk. To do so, find the betas for all your funds/stocks. Each beta is then multiplied by the percentage of your total portfolio that stock represents (i.e., a stock with a beta of 1.2 that comprises 10% of your portfolio would have a weighted beta of 1.2 times 10% or .12). Add all the weighted betas together to arrive at your portfolio's overall beta.
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Old 01-05-2015, 02:07 PM   #13
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Morningstar lists Wellesley's standard deviation as
3 yr: 4.01
5 yr: 4.69
10 yr: 6.17
Wellington
3 yr: 6.0
5yr: 8.41
10yr: 9.76
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Old 01-05-2015, 02:22 PM   #14
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My vg 3 fund 1 year average was 7.85. I don't have my exact AA with me, but I think I'm at 40 total stock, 20 int, 40 total bond. I'm going to get some Wellesley soon. When I first got into vanguard a few years ago, the vg guy talked me into the 3 fund approach in lieu of Wellesley and Wellington, saying that expenses were less.


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Old 01-05-2015, 02:53 PM   #15
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Don't know about 5-10 years, but for 1 and 3 years, my AA outperformed Wellesley, but underperformed Wellington. Since my AA falls between the two, this is not a big surprise. However, if I dig deeper... my actual 2014 return is 9.3%. It would have taken a 70/30 mix of Wellington/Wellesley to equal that, which according to M* is a 56/44 AA. Depending on how you count the real estate in my AA (I assume most would call it equity), that appears to be a less risky AA for the same return. If I crank up the Wellington/Wellesley mix to 80/20, which equates to my 60/40 AA, the 2014 return is 9.5%, which says my portfolio slightly underperformed a risk-equivalent mix of Wellington/Wellesley. I suspect that's related to my international equities and high-yield bonds, both of which performed poorly in 2014. I also include 5% cash in my return figures, which is a lot more than these funds hold. Overall, I'm fairly happy with the comparison. But it does make you wonder about simplification.
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Old 01-05-2015, 03:08 PM   #16
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Quote:
Originally Posted by Cobra9777 View Post
Don't know about 5-10 years, but for 1 and 3 years, my AA outperformed Wellesley, but underperformed Wellington. Since my AA falls between the two, this is not a big surprise. However, if I dig deeper... my actual 2014 return is 9.3%. It would have taken a 70/30 mix of Wellington/Wellesley to equal that, which according to M* is a 56/44 AA. Depending on how you count the real estate in my AA (I assume most would call it equity), that appears to be a less risky AA for the same return. If I crank up the Wellington/Wellesley mix to 80/20, which equates to my 60/40 AA, the 2014 return is 9.5%, which says my portfolio slightly underperformed a risk-equivalent mix of Wellington/Wellesley. I suspect that's related to my international equities and high-yield bonds, both of which performed poorly in 2014. I also include 5% cash in my return figures, which is a lot less than these funds hold. Overall, I'm fairly happy with the comparison. But it does make you wonder about simplification.
...and that's all I was attempting to convey.
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Old 01-05-2015, 04:35 PM   #17
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On a tax-adjusted basis? Yes, I think so.

These funds lose 1% to 2% a year to income taxes.
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Old 01-05-2015, 05:12 PM   #18
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1 year 2.94%
3 year 14.89%
5 year 11.2%
10 year 7.33%

1 year got killed by oil and international.
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Old 01-05-2015, 08:27 PM   #19
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Like many, I've outperformed Wellesley and under-performed Wellington.

1 year 8.24%
3 year 12.67%
5 year 9.67%

If it were not for the various restricted choices in our 401K, 403B, 457, etc, I might well just split my money between the two and call it a day.
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Old 01-05-2015, 09:28 PM   #20
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I did not beat them last year, but did over the 3, 5 and 10 year periods:
1yr.: 7.4%
3yr. 16.4%
5yr. 12.6%
10yr.: 9.3%
Not sure how to answer your Poll however, as there does not appear to be enough choices to fit my results?
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