Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Vanguard Wellington and Wellesley
Old 05-12-2013, 06:15 PM   #1
Recycles dryer sheets
kmt1972's Avatar
 
Join Date: Mar 2013
Location: Scarsdale
Posts: 175
Vanguard Wellington and Wellesley

Reading this board it seems that a lot of you have significant AA into Vanguard Wellington and Wellesley (which I have assume are VWELX and VWINX.) It also seems taken as axiomatic on this board that investing into these two funds are good ideas. Until I came to this board I have never really have heard of these two funds. Can someone explain to me the reasons what are the advantages of these two funds over their peers. Thanks.
__________________

__________________
"There are no solutions...there are only trade-offs." - Thomas Sowell

Looking to retire or semi-retire by 45 based on our net worth going to $6 million outside our house.
kmt1972 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 05-12-2013, 06:37 PM   #2
Thinks s/he gets paid by the post
 
Join Date: Feb 2007
Posts: 1,905
Quote:
Originally Posted by kmt1972 View Post
Reading this board it seems that a lot of you have significant AA into Vanguard Wellington and Wellesley (which I have assume are VWELX and VWINX.) It also seems taken as axiomatic on this board that investing into these two funds are good ideas. Until I came to this board I have never really have heard of these two funds. Can someone explain to me the reasons what are the advantages of these two funds over their peers. Thanks.

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.
__________________

__________________
ejman is offline   Reply With Quote
Old 05-12-2013, 07:11 PM   #3
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 8,625
They invest in large-cap US value stocks and corporate bonds, so they are balanced funds. They have a long-term track record. Here is this week's discussion at bogleheads about them: Bogleheads • View topic - Another Wellesley vs Target Retirement Income Question for your reading pleasure.
__________________
LOL! is offline   Reply With Quote
Old 05-12-2013, 07:42 PM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Quote:
Originally Posted by ejman View Post
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.

From Morningstar
Quote:
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.
__________________
clifp is offline   Reply With Quote
Old 05-12-2013, 08:58 PM   #5
Full time employment: Posting here.
 
Join Date: Feb 2008
Posts: 920
I love 'em, the main reason I don't just park everything in Wn/Wy is because of what I've learned on these forums regarding tax efficiency with asset allocation.
__________________
tuixiu is offline   Reply With Quote
Old 05-12-2013, 09:22 PM   #6
Full time employment: Posting here.
 
Join Date: Nov 2008
Location: Harrogate, UK
Posts: 864
I am just finalizing the last of my switch from Edward Jones to Vanguard. Currently have my Roth in the Lifecycle Mod Growth and most of the rest in Total Stock/International....with some more cash waiting.... I am STILL tempted to just put almost everything in to Wellington. The cash I have I am still trying to pry out of my fingers....and put into something bond-ish related. Even though the Wellington might not be the best answer....it sure doesn't sound bad.
__________________
F4mandolin is offline   Reply With Quote
Old 05-12-2013, 09:25 PM   #7
Thinks s/he gets paid by the post
 
Join Date: Jul 2005
Posts: 3,862
Because they are balanced funds they have less volatility than nearly all pure stock funds. That can be easier to stick with. It's also beneficial for those making regular withdrawals, such as ER's. Even if it's just keeping distributions.
__________________

__________________
Animorph is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 01:01 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.