Originally Posted by ejman
Low cost, good long time record. Seems that active management is actually contributing a smidgen of + performance since the index counterparts at Vanguard have not performed as well.
A really long record. Wellington has been around since July 1929 right before the stock market crash and has delivered 8.75% percent performance 5.3% (after inflation).
Wellesley has only been around 43 years and during that time it has gone up 10.2% 6% after inflation.
They have also been remarkable consistent which is perhaps the most important thing for a retiree.
Of course, the fund wasn't always the high-quality, value- and dividend-oriented stock and bond fund it is today. But its record since it codified that approach in 1978 remains impressive. From the end of that year through 2012, the fund gained an annualized 11.6%, beating its average rival by 2 percentage points.
The fund's results under the present managers stand out, too. Since Ed Bousa, the longest-tenured manager, became the fund's lead in December 2002, it has gained an annualized 8.2% through 2012, compared with 6.4% for the category average.
Consistency hasn't been a problem either. The fund has beaten its typical category peer and its largest passive rival, Vanguard Balanced Index VBINX, in every one of the more than 40 rolling five-year periods since Bousa formally took over from his predecessor. And the fund has achieved these returns without more volatility than the category average.
The expense ratios of .18% (Admiral funds) are only .10% or so higher than most index funds.
Any many ways I feel more comfortable recommending a 60/40 mix of Wellington and Wellesley than 60% Total Stock Market/40% total bond market.
Mostly because I don't trust people (forum members excepted) to actually rebalance when the market crashes or soars. I trust the W&W manager to do so.
Past performance, yada yada but I think most retirees should be able sleep well at night with these funds.