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Wellesley Income Fund
Old 03-12-2005, 04:18 PM   #1
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Wellesley Income Fund

I love the Wellesley Income Fund and have all my
taxable invested there plus about 1/2 of my
Mom's.

Does anybody but me worry that the equity part
(about 38%) is too concentrated in only 55 stocks?

Cheers,

Charlie
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Re: Wellesley Income Fund
Old 03-12-2005, 04:40 PM   #2
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Re: Wellesley Income Fund

Charlie

They(Wellesley) are a managed value balanced fund - good history AND you are paying them a management fee.

Let them do their thing and trust them to stay properly balanced.

Talk's cheap isn't it - heh, heh, heh - I did nothing with my Lifestrategy mod and cons during the last little dip(2000-2003).

Calm with aplom - wellllll sort of.
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Re: Wellesley Income Fund
Old 03-12-2005, 04:43 PM   #3
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Re: Wellesley Income Fund

I think you're in pretty good shape Charlie. I went back and forth between Wellesley and Wellington before setteling on the Wellington. If the DOW tanks I dont think it matter if Well is in 38 or 88 stocks. It might actually make a faster comeback with the existing 38.

If you're really nervous about it. Sell some or all off and reinvest...where CDs? Raw materials? Up to you.

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Re: Wellesley Income Fund
Old 03-12-2005, 08:32 PM   #4
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Re: Wellesley Income Fund

Charlie -

Still my biggest holding. I have no worries about the money there at all. About the only bad thing I can say about Wellesley is the long term return rate may look too good to be true, and given the good performance of the value stock pickings and the excellent environment for bonds during the falling rate situation, the future returns may not be in those heady 10-11% per year rates.

I think the last analysis I bothered to read about reducing volatility by increasing stock holdings said that about 20 varied stocks you probably had enough diversity. 55 is definitely good.

The top 10 equity holdings are also under 15% of the net assets of the fund. Pretty good names in those 10. And the valuations on the stock portfolio are a lot less heady than the S&P500.

My opinion is if you're past your 60's, or earlier in an ER curve + have a low debt position + want a good yield with some inflation offsetting NAV upside...you can do a lot worse than a ballast position of wellesley...especially in the admiral shares @ .19-20% expense charges. I fall solidly into that latter category. I can definitely see Wellesley as remaining 30-40% of my taxable holdings for the term of my retirement.

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Re: Wellesley Income Fund
Old 03-13-2005, 08:23 PM   #5
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Re: Wellesley Income Fund

I wasn't thinking about selling Wellesley .... just wanted
some comments about the stock concentration.
Thanks for the warm fuzzy TH & unclemick.

Bum, I have my wife's IRA in Wellington which balances off the Wellesley in our taxable.

Cheers,

Charlie
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Re: Wellesley Income Fund
Old 03-14-2005, 05:24 AM   #6
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Re: Wellesley Income Fund

Now here is the less warm, left handed, INTJ, dare I say Norwegian widow version.

Mr Market has the perfect storm - interest rates rise(rapid rate of change) to overwhelm duration of the bond side while the market P/E collapses for value stocks(happens every great once in a while).

Your current 3.6% yield goes up, BUT the (value) of your Wellesley quoted in market $ goes south.

??Which end of the stick will you take comfort in??

Why you own something is very important. Especially if true grit is called upon - have faith in Mr Market - there will be a test.
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Re: Wellesley Income Fund
Old 03-14-2005, 08:58 AM   #7
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Re: Wellesley Income Fund

At age 70 I need the income from Wellesley and the
prospect of reduced NAV does not bother me (much)
provided I don't have to sell any shares.

The thing that would bother me over the long run is
if dividends and interest thrown off do not keep pace
with inflation.

I think the "perfect storm" for Wellesley might be
a repeat of "stagflation" ...... rising rates without
GDP growth. Anybody see that coming?

Cheers,

Charlie
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Re: Wellesley Income Fund
Old 03-14-2005, 09:29 AM   #8
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Re: Wellesley Income Fund

Hey Mick...havent we had a few of those 'perfect storms' since Wellesley first aired? According to moneycentral (for what thats worth), the worst calendar year return for vwinx was -6.43% in 1974, and the worst 3 year return was -.30 from 72-74.

Granted whenever interest rates shot up, the fund takes a beating. In fact, I reduced my holdings a little last year to avoid the drop, but not much downside every materialized.

Oh well, I slid my 'reductions' into wellington, and thats done fairly well since then.
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Re: Wellesley Income Fund
Old 03-18-2005, 06:27 PM   #9
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Re: Wellesley Income Fund

Hello,

How would Wellesley fit in a tax-deferred IRA account.I'm at 70/30/10 retired ,and thinking this looks like an excellent fund.Thanks for responses.

Regards,
Bill
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Re: Wellesley Income Fund
Old 03-19-2005, 06:57 AM   #10
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Re: Wellesley Income Fund

[quote]

Charlie: If anybody really knew, they probably wouldn't tell the rest of us.
I carry Wellsley, Wellington also. (In IRA).
I approach all my mutual funds from a "total return" perspective.
Funds like Wellsley, Wellington, etc. have had the winds at their back for last 20 years or so. (Bull mkt. on both bonds and stocks.)
Given where we are in the bond and equity mkts., at this stage, and taking a total return perspective INMHO,
it's going to be a tough job to squeeze out much total return from these funds for the next few years.
Not that anybody gives a darn, what I have decided to do is step aside, with the exception of about 28% alloted to stock mutual funds, with the idea to let them run.

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Re: Wellesley Income Fund
Old 03-19-2005, 07:26 AM   #11
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Re: Wellesley Income Fund

I've heard a lot of praise for the Wellington/Wellesley funds on this board. I'm 30, wife is 29, are they good funds for us, or are they too convervative? Hope to ER in mid to late 40's
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Re: Wellesley Income Fund
Old 03-19-2005, 09:01 AM   #12
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Re: Wellesley Income Fund

Laurence, I think Wellesley as a long term core
investment would be a good bet. *At your age I
would consider adding Total International, REIT
and Small Cap Value in equal amounts to bring
your total stock allocation to about 70%. *45%
to Wellesley and 18.3% to each of the others would
be about right. *All of these should be in sheltered
accounts. *

Remember, there are a million ways to skin the
cat ... all pretty much valid if diversification and
age appropriate commitment to stocks are followed
and you use your sheltered and taxable accounts
wisely. *

A simpler approach, for example, would be to just
put it all into one of the Vanguard Target Retirement
Funds and let her rip. *

Cheers,

Charlie
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Re: Wellesley Income Fund
Old 03-19-2005, 01:02 PM   #13
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Re: Wellesley Income Fund

Quote:

A simpler approach, for example, would be to just
put it all into one of the Vanguard Target Retirement
Funds and let her rip.

Cheers,

Charlie

Simplicity is nice - less headache and hassel of rebalancing.
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Re: Wellesley Income Fund
Old 03-19-2005, 01:26 PM   #14
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Re: Wellesley Income Fund

Good advise Charlie!
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Re: Wellesley Income Fund
Old 03-19-2005, 03:50 PM   #15
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Re: Wellesley Income Fund

Quote:
I've heard a lot of praise for the Wellington/Wellesley funds on this board. *I'm 30, wife is 29, are they good funds for us, or are they too convervative? *Hope to ER in mid to late 40's
I would say that Wellesley is too conservative at 40/60 stocks/bonds. Wellington might be OK at 60/40, but it is too slow for my taste. Then again, I have a stomach for more volatility than many.
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Re: Wellesley Income Fund
Old 03-20-2005, 07:23 AM   #16
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Re: Wellesley Income Fund

Quote:

I would say that Wellesley is too conservative at 40/60 stocks/bonds. *Wellington might be OK at 60/40, but it is too slow for my taste. *Then again, I have a stomach for more volatility than many.
As Charley mentioned, think age appropriate. Given your age, and your apparant sophistication of the mkts. in general, you're probably on the right track.
With the changes that I personally have made in the last few months, would probably draw a big "yawn" from you
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Re: Wellesley Income Fund
Old 03-20-2005, 11:25 AM   #17
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Re: Wellesley Income Fund

Thing is...unless you take on a WHOLE lot more volatility, its pretty hard to beat the long term annual returns of Wellesley. Even Wellington doesnt do it, although Wellington is ~80 years old vs Wellesleys ~35.

You can also sort-of buy just the actively managed value stock component, managed by the same company..I think its the "equity income" fund?
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Re: Wellesley Income Fund
Old 03-20-2005, 02:30 PM   #18
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Re: Wellesley Income Fund

I would love to use one of these as a major holding... too bad over 50% of my retirement stash is in taxable accounts. * :-/

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Re: Wellesley Income Fund
Old 03-20-2005, 05:06 PM   #19
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Re: Wellesley Income Fund

So what do you do in taxible? Muni.'s? What's your opinion on the various 'tax managed' funds from the fund families?
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Re: Wellesley Income Fund
Old 03-20-2005, 10:14 PM   #20
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Re: Wellesley Income Fund

Quote:
Thing is...unless you take on a WHOLE lot more volatility, its pretty hard to beat the long term annual returns of Wellesley. *Even Wellington doesnt do it, although Wellington is ~80 years old vs Wellesleys ~35.

You can also sort-of buy just the actively managed value stock component, managed by the same company..I think its the "equity income" fund?
TH: I've owned Wellsley and Wellington for over 20 years in my IRA. For a guy your age, with the time you have before you have to do any heavy duty sell downs, they are both good solid choices.

For myself, I trimmed my sails a whole bunch, including taking a little over half off the table in both Wellsley and Wellington, and same on the other funds I own.

I personally feel that for the next few years, maybe more, balanced funds are going to be hard put to return anything. I, as I mentioned on another post appreciate dividends, but I am more interested in total return.

Basically, I don't need to go through another gut grinder
at my stage. Hell, you should probably care less, especially if you"re staying liquid enough to belly up to the bar when valuations on bonds, and equities make a little more sense.

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