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Old 08-27-2016, 11:23 PM   #21
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I'm thinking of throwing all my stuff 50/50 into these two funds and quit overthinking stuff!
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Old 08-27-2016, 11:33 PM   #22
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If I were to buy some of this Wellesley fund, I am thinking it would be best within a tax sheltered account since so much of it is bonds ?
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Old 08-28-2016, 05:36 AM   #23
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If I were to buy some of this Wellesley fund, I am thinking it would be best within a tax sheltered account since so much of it is bonds ?
You are correct.
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Old 08-28-2016, 08:09 AM   #24
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Check out the Vanguard tax managed fund for taxable accounts.
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Old 08-28-2016, 08:27 AM   #25
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I hope I'm not exposing my ignorance here but aren't the Wellesley and Wellington funds similar in most respects except for their AA approach (40/60 vs 60/40 aprox)? So my question for those of you that have commented about having your monies in both funds, how does that reconcile with your OVERALL AA philosophy? Wouldn't you tend to pick one or the other?
1) In equal portions, this produces a 50/50 mix.
2) Not sure about the exact equity overlap, but I recall it is not so great. So you end up with more equity diversification. Edit: about half of companies in VWINX are in VWELX.
3) If you have tax-advantaged account, Wellesley would be preferable there. Opposite for Wellington.

In my simple view, those are 3 reasons why you might go with both, instead of just one.
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Old 08-28-2016, 10:00 AM   #26
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I'm thinking of throwing all my stuff 50/50 into these two funds and quit overthinking stuff!
We basically did this last December and have no regrets.

As far as the bond exposure to rising rates, there as several articles specific to these funds that demonstrate that the short term impact is offset by the long term growth in yield. These are actively managed funds and reading the list of bond investments, they are managing to the yield curve maintaining a 5.6 yr duration, and some interesting moves with notes/securites held with Japan, positioning, I assume, for more US bond capture as rates rise. The short term risk lies mainly with market reaction, wherein a sell off of the fund drives them to sell their best yielding highest rated bonds to liquidate for market demand.
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Old 08-28-2016, 10:32 AM   #27
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I hope I'm not exposing my ignorance here but aren't the Wellesley and Wellington funds similar in most respects except for their AA approach (40/60 vs 60/40 aprox)? So my question for those of you that have commented about having your monies in both funds, how does that reconcile with your OVERALL AA philosophy? Wouldn't you tend to pick one or the other?
And to join with you in the tall conical hat group - if you are 50% Wellington and 50% Wellesley doesn't that mean you are 50/50 stocks/bonds? If so, what's the point? Is a 50/50 stock/bond split really going to work out much more favorably than 60/40 or 40/60?

I should refresh the screen before commenting the next day.... target 2019 answered well, though I still think it's kind of hair splitting on the differences.
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Old 08-28-2016, 10:44 AM   #28
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The 1st two tables on this page show how much the difference might mean to you.
https://www.bogleheads.org/wiki/Asset_allocation

That is viewed from a high level. For you it may not matter, and that's ok.

After "how much you invest", asset allocation is 2nd most influential decision.
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Old 08-28-2016, 11:31 AM   #29
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Originally Posted by Floridatennisplayer View Post
I'm thinking of throwing all my stuff 50/50 into these two funds and quit overthinking stuff!
Quote:
Originally Posted by Happyras View Post
We basically did this last December and have no regrets.

As far as the bond exposure to rising rates, there as several articles specific to these funds that demonstrate that the short term impact is offset by the long term growth in yield. These are actively managed funds and reading the list of bond investments, they are managing to the yield curve maintaining a 5.6 yr duration, and some interesting moves with notes/securites held with Japan, positioning, I assume, for more US bond capture as rates rise. The short term risk lies mainly with market reaction, wherein a sell off of the fund drives them to sell their best yielding highest rated bonds to liquidate for market demand.
Where else can you get professional money management which includes rebalancing for +/- .18% (Admiral level Wellington/Wellesley)?
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Old 08-28-2016, 12:55 PM   #30
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Where else can you get professional money management which includes rebalancing for +/- .18% (Admiral level Wellington/Wellesley)?
Yeah, I don't think it exists. And even if you don't qualify for Admiral level, the cost is around .25%...so even for the small investor, well, you can't go wrong.

I imagine eventually, I will have just about everything in these two funds. They serve my purpose and do it at a rate that can't be beat. And...I don't have to worry about rebalancing or shifting assets around every year.
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Old 08-28-2016, 09:45 PM   #31
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Wellington was my first purchase after finding this board, I had to move an former company 401k into an IRA. Ten years later and no regrets. While it represents less than 5% of my portfolio now, a Wellington/Wellesly mix is a distinct possibility for retirement. What's the dividend on Wellesly?
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Old 08-28-2016, 09:56 PM   #32
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What's the dividend on Wellesly?
30 day SEC Yield: 2.38%
TTM Yield: 2.81%
Dividend Yield: 3.37% (for the stock portfolio)

FWIW: The average weighted maturity of their bonds is about 10 years, the average weighted duration is about 7 years.

Source: Morningstar.
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Old 08-28-2016, 11:05 PM   #33
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I use wellesley for half of my emergency fund. I figure keep one year's expenses in an online high yield checking at 1%. Why not float the other half and get 7-8%. Yes there is more risk than a CD ladder but Wellesley has had one negative year in the last ten years and it only went down 10%. Yes, it is in a taxable acct. I happen to be in the lowest tax bracket so in this instance I'm not all that concerned about tax efficiency. This is not part of my overall AA.
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Old 08-29-2016, 05:53 AM   #34
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If you were retired and had 100k in wellington and 100k in wellesley how much would your monthly income from dividends have been last year? can anyone tell me?
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Old 08-29-2016, 08:03 AM   #35
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In short, about $477/month on average, but paid quarterly for just income.

-----------------------------------------
Wellesley assuming you bought on 6/19/15 and held for a year and took all distributions in cash:

Initial investment on 6/19/15: $100,000/$61.59; 1,623.640 shares

Income distributions: (0.465+0.401+0.545+0.469)*1,640.640 = $3,084.40
CG distributions: (0.036+1.439)*1,640.640 = $2,419.94

Value on 6/15/16 = 1,640.640*$62.25 = $102,129.84

Dividend and capital gains distributions
Distribution Type Most Recent
Distribution Record Date Reinvest Date Payable Date Reinvest Price Distribution Yield SEC Yield
Dividend $0.46500 06/15/2016 06/16/2016 06/17/2016 $62.25 — 2.46% B
Dividend $0.40100 03/15/2016 03/16/2016 03/17/2016 $60.46 — —
Dividend $0.54500 12/15/2015 12/16/2015 12/17/2015 $59.58 — —
ST Cap Gain $0.03600 12/15/2015 12/16/2015 12/17/2015 $59.58 — —
LT Cap Gain $1.43900 12/15/2015 12/16/2015 12/17/2015 $59.58 — —
Dividend $0.46900 09/17/2015 09/18/2015 09/21/2015 $59.84 — —
Dividend $0.44500 06/18/2015 06/19/2015 06/22/2015 $61.59 — —

Wellington assuming you bought on 6/18/15 and held for a year and took all distributions in cash:

Initial investment on 6/18:/15: $100,000/$68.16; 1,467.136 shares

Income distributions: (0.454+0.405+0.509+0.433)*1,467.136 = $2,642.31
CG distributions: (0.111+2.228)*1,467.136 = $3,431.63

Value on 6/15/16 = 1,467.136*$65.09 = $95,495.88

Dividend and capital gains distributions
Distribution Type Most Recent
Distribution Record Date Reinvest Date Payable Date Reinvest Price Distribution Yield SEC Yield
Dividend $0.45400 06/15/2016 06/16/2016 06/17/2016 $65.09 — 2.42% B
Dividend $0.40500 03/15/2016 03/16/2016 03/17/2016 $63.54 — —
Dividend $0.50900 12/23/2015 12/24/2015 12/28/2015 $63.98 — —
ST Cap Gain $0.11100 12/23/2015 12/24/2015 12/28/2015 $63.98 — —
LT Cap Gain $2.28800 12/23/2015 12/24/2015 12/28/2015 $63.98 — —
Dividend $0.43300 09/17/2015 09/18/2015 09/21/2015 $64.42 — —
Dividend $0.43300 06/18/2015 06/19/2015 06/22/2015 $68.16 — —

Combined:

Initial investment in 6/2015:..$200,000.00
Income dividends received:.........5,726.71 ($477.25/month on average, but pays quarterly)
CG distributions received:...........5,851.57
Total distributions received:.......11,578.28

Ending value, 6/2016:............$197,625.72
Aggregate return.............................4.6%
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Old 08-29-2016, 08:16 AM   #36
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I'm a fan of both Wellesley and Wellington... I have recommended them to others and my plan would be for DW to shift into them when I am gone for simplicity.

They don't currently work well for me due to tax efficiency... I want to hold all my fixed income in tax-deferred and equities in taxable due to 0% tax rate on qualified dividends and LTCG. While the current AA for the domestic equities/bonds portion of my tax-deferred accounts is close to 40/60 so I could use Wellesley that AA within my tax deferred is changing over time as I do Roth conversions. Also, the duration of bonds in Wellesley is more than I would like given the likelihood of increase in interest rates so I use target-maturity bond funds to mitigate that risk.

However, I am hopeful that someday my situation will be such that one of those funds will fit into my portfolio and if I ever get to the point where I want a "set it and forget it" fund, those tow will be at the top of the list for me.
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Old 08-29-2016, 08:56 AM   #37
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Originally Posted by pb4uski View Post
I'm a fan of both Wellesley and Wellington... I have recommended them to others and my plan would be for DW to shift into them when I am gone for simplicity.

They don't currently work well for me due to tax efficiency... I want to hold all my fixed income in tax-deferred and equities in taxable due to 0% tax rate on qualified dividends and LTCG. While the current AA for the domestic equities/bonds portion of my tax-deferred accounts is close to 40/60 so I could use Wellesley that AA within my tax deferred is changing over time as I do Roth conversions. Also, the duration of bonds in Wellesley is more than I would like given the likelihood of increase in interest rates so I use target-maturity bond funds to mitigate that risk.

However, I am hopeful that someday my situation will be such that one of those funds will fit into my portfolio and if I ever get to the point where I want a "set it and forget it" fund, those tow will be at the top of the list for me.
+1

Maximizing tax efficiency is difficult with stocks and bonds in the same fund. Our taxable is 100% equities. Tax-deferred is roughly 50/50, but we use the tax-deferred account to rebalance. Like pb4uski, our tax-deferred AA necessarily drifts toward bonds as we convert to Roth, where we hold equities. I also like to slice/dice a bit.

Other reasons: we only own ETFs, primarily to avoid year-end CG distributions. The expense ratio, while low by most standards, is still quite a bit higher than our index ETFs. We prefer highly diversified index funds over actively managed funds, and we house it all at Fidelity, where Vanguard mutual funds would be costly to trade.
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Old 08-29-2016, 09:15 AM   #38
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All of our retirement funds are tax deferred or Roth. We have roughly half in Wellington (IRA and Roth) and the other half (401k) in a combination of S&P 500, T.RowePrice Target 2030, and Stable Value.

My mom and step mom use 100% Wellesley but have lower incomes so taxes are not an issue.
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Old 08-29-2016, 11:00 AM   #39
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Wellesley Fund

I have 100K sitting on the sideline (as cash) in my rollover IRA. I was waiting for a dip but it is not happening. I wonder if I should just buy now? I cannot DCA into Wellesley at Fidelity (too expensive.)


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Old 08-29-2016, 11:12 AM   #40
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I have 100K sitting on the sideline (as cash) in my rollover IRA. I was waiting for a dip but it is not happening. I wonder if I should just buy now? I cannot DCA into Wellesley at Fidelity (too expensive.)
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You could open an IRA at Vanguard, and then transfer in from the Fidelity IRA whatever you wanted, and then buy Vanguard funds for free.
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