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04-14-2008, 11:11 AM
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#1
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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DODIX vs. VWINX
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...
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04-14-2008, 11:18 AM
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#2
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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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.
__________________
Numbers is hard
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04-14-2008, 11:20 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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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?
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04-14-2008, 02:21 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Aug 2006
Posts: 2,433
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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
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04-14-2008, 04:20 PM
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#5
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2003
Location: Kansas City
Posts: 7,968
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Quote:
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.
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Yep.
heh heh heh - and then you too can say Pssst Wellesley every once in a while when you post. .
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04-15-2008, 08:31 AM
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#6
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,501
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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!"
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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04-15-2008, 08:51 AM
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#7
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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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.
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04-15-2008, 09:03 AM
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#8
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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The order is in.
Pssst Wellesely (can I still be in the club even though it's the Investor Share branch)?
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04-15-2008, 09:06 AM
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#9
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2002
Location: Texas: No Country for Old Men
Posts: 50,022
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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...
__________________
Numbers is hard
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04-15-2008, 09:06 AM
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#10
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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Quote:
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.
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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.
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04-15-2008, 11:48 AM
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#11
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Moderator Emeritus
Join Date: Jan 2007
Location: New Orleans
Posts: 47,501
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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.
__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities. - - H. Melville, 1851.
Happily retired since 2009, at age 61. Best years of my life by far!
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04-15-2008, 08:11 PM
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#12
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Thinks s/he gets paid by the post
Join Date: Mar 2005
Location: yonder
Posts: 2,851
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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.
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04-15-2008, 09:20 PM
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#13
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2004
Location: SW Ohio
Posts: 14,404
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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.
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