Since Vanguard's Wellesley Income fund has such a following here, check out this Interview with Jack Ryan and Earl McEvoy, the outgoing managers of Vanguard's Wellesley Income fund.
I thought the Wellesley proponents would like this quote:
I was hoping with all their learnin', they could come up with something better than "Gee, this is scary."
Also shows that you don't have to be a looker to manage money.
- Alec
I thought the Wellesley proponents would like this quote:
During your tenure, the Wellesley Income Fund nearly kept pace with the Standard & Poor's 500 Index, despite the fund's sizable bond allocation. Are there any takeaways for investors?
Mr. McEvoy: With 65% bonds, we had a favorable tailwind, with rates basically coming down during that period. So that helped. I did go back and look at the returns of bonds and stocks for the last 20 years, and basically, stocks were up 11%, junk bonds were up 8%, and high-grade bonds were up about 7% [as of April 30, 2008]. So our ability to keep pace with the stock market is really a tribute to what Jack did on the stock side.
Mr. Ryan: I think our job as portfolio managers is to add value to the process. If you can run with the pack and periodically have a good idea, that's what you need to do to produce returns above average. For this fund, because of its stock and bond mix, quite often when one asset class does well or poorly, that result is dampened out. I've been invested in the Wellesley Income Fund for decades, and there's never been a point in time where I've said, "Gee, this is scary." The negative returns have tended to be small. It's hard to have a really scary year. We try to avoid that risk in Wellesley.
I was hoping with all their learnin', they could come up with something better than "Gee, this is scary."
Also shows that you don't have to be a looker to manage money.
- Alec