DODIX vs. VWINX

[redduck]

I need some help figuring this out. I have about $100,000 of DODIX (Dodge and Cox Income Fund) in an IRA. The expense ratio is .44.

I am thinking of selling the DODIX and replacing it with VWINX (Vanguard Wellesley) (that should make unclemick happy). The expense ratio is .25. Anyhow, the fee of selling the DODIX is $50 and the buying of VWINX is $50.

Does it make finanicial sense to make these trades? I plan on not touching this money for approximately a bunch of years (4-10 years)?

I also understand that these two funds are not quite comparable, but I think they are close enough in what they do.

Thanks...

[REWahoo]

They are both low cost funds with a very good long term track record. If you understand that DODIX is a bond fund and Wellesley is a balanced fund (~35% stocks, 65% bonds) and that change meets your asset allocation requirements, looks like a sound move to me.

[samclem]

Well, .0044 - .0025 = .0019
.0019 x $100000 = $190 dollars per year in saved expenses

So, you'd have your trading costs recovered in reduced fees in just over 6 months.

No tax implications (since you are in an IRA).

Is that what you are wanting to know?

[FIRE'd@51]

Since you are talking about 100K, you can buy the Admiral share class of Wellesley, which have an ER of 0.15% instead of 0.25%.

Wellesley Admiral shares - VWIAX

[unclemick]

Originally Posted by REWahoo

They are both low cost funds with a very good long term track record. If you understand that DODIX is a bond fund and Wellesley is a balanced fund (~35% stocks, 65% bonds) and that change meets your asset allocation requirements, looks like a sound move to me.

Yep.

heh heh heh - and then you too can say Pssst Wellesley every once in a while when you post. .

[Want2retire]

I don't have anything intelligent to add about Dodge & Cox that hasn't been said, but in February I bought into Wellesley Admiral (VWIAX) and I am totally ecstatic about it. I love the low volatility in these tough times, and we got a nice dividend in March.

One of Wellesley's co-managers is retiring https://personal.vanguard.com/us/Van...142008_ALL.jsp
but there are several other co-managers so there should be continuity.

Besides, like UncleMick I can now say, "Psst!! Wellesley!"

[redduck]

Thanks for the help/advice/input. I'm making the switch-over this AM. The asset allocation doesn't change my portfolio very much (as far as I can tell). And, it doesn't seem like a costly move to make (thanks, samclem, for the math input).

I called Vanguard regarding the Admiral shares, but I can't get this fund because the fund is being placed in Schwab. I'd have to keep it in the Vanguard group to get the better (lesser) fees. Good thought, though.

The only reason I hestitated buying this puppy is that I'd obligated to say, "Pssst!! Wellesley!" Want2retire puts in two "ss" in "Pssst" while the master, unclemick seems to use three "s's." Gotta' go with the master, here.
I was hoping to sidestep the whole issue of ever having to say "Pssst Wellesely," but the peer pressure got to me and I've obviously caved.

[redduck]

The order is in.

Pssst Wellesely (can I still be in the club even though it's the Investor Share branch)?

[REWahoo]

Some of us own Wellesley and have had our "Pssst!!" device modified so that we no longer have the urge to post it. Really nice to avoid having to "Pssst!!" in public...

[samclem]

Originally Posted by redduck

I called Vanguard regarding the Admiral shares, but I can't get this fund because the fund is being placed in Schwab. I'd have to keep it in the Vanguard group to get the better (lesser) fees. Good thought, though.

So, why not open up a Vanguard IRA? It only takes a few minutes, you'd save the $50 buy-in fee for the purchase of the fund immediately, and you'd save $100 every year by getting access to the lower ER in Admiral class. $100 bucks ain't much, but it's a lot of beer and pizza, and the only increased complexity is an additional statement per cycle from another company. Heck, if your slow slide toward lower-cost investing continues, you'll want to move everything there eventually, anyway.

Psst . . .oh, never mind.

[Want2retire]

I think redduck is taking to this like a duck to water. He/she can even "Pssst! Wellesley!" properly already! As for me, I'm still learning.

[redduck]

I don't actually have an IRA, I have a Keogh and a Keogh is kind of a nuisance. Vanguard won't deal with it. Fidelity almost will, but only if I change it into something else (which still wouldn't be an IRA). I received the paperwork from Fidelity and decided to pass. Once I retire, it can more easily go to Vanguard. I already have an active Vanguard account as does my wife (hint, hint, Want2Retire). And, the wife also has her retirement account there as well. It's just that I can't get there from here.

[samclem]

Okay, I understand the situation now. I had the same issue with my solo401k--Vanguard doesn't do them, so I had to open an account with Fidelity.