Shhhhh...Wellington closes to new investors...

[Redbugdave]

In my semiannual report there was a flyer which says, "Closed UFN". All of us that are already in it can keep contributing.

I guess a lot of baby boomers are taking money out of the mattress with the economy doing better...

And I thought only we had the secret with Wellington and Wellesley...

[braumeister]

My understanding is that it's only closed to those buying through other sources. If you're using a Vanguard fund account you can still get in.
Anyone know if that's right or not?

[Maenad]

Well, I just logged in to Vanguard and pretended that I was going to buy some. It let me pick out the fund from the list, so I'm assuming I could.

I wonder why they've closed it?

[Redbugdave]

The little flyer says closed, (other than clients who invest through a Vanguard brokerage account). Current shareholders can buy, redeem, exchange, etc.

But it does not have that red "closed" box like Primecap has on the website.

I think you are OK then, Brahm...

[Bikerdude]

I just added to my account through Schwab.

[NW-Bound]

I once bought Dodge & Cox through Schwab 10 years ago. They charged me $50. For a frugal guy like me, that hurt!

Just now looked it up. It's $76. Is that what you paid?

Due to peer pressure (pssst...), I started to tiptoe into Wellesley and Wellington 4 years ago, by making annual IRA contributions for my wife. I opened an account with Vanguard for that purpose to avoid the high fee.

[Animorph]

Quote:

Originally Posted by NW-Bound I once bought Dodge & Cox through Schwab 10 years ago. They charged me $50. For a frugal guy like me, that hurt! Just now looked it up. It's $76. Is that what you paid? Due to peer pressure (pssst...), I started to tiptoe into Wellesley and Wellington 4 years ago, by making annual IRA contributions for my wife. I opened an account with Vanguard for that purpose to avoid the high fee.

I opened up an account directly with Dodge & Cox to avoid the brokerage fees. Direct is also good for lower minimums, shorter redemption fee periods, and starting positions in soft-closed funds or those not offered via brokerages. All tie in to an account at the brokerage so it's easy to EFT money between all the accounts.

[NW-Bound]

Yes, I have a few of those. Hence, a poster once expressed surprise when I said I had 22 investment accounts tracked by Quicken.

[Bikerdude]

Quote:

Originally Posted by NW-Bound I once bought Dodge & Cox through Schwab 10 years ago. They charged me $50. For a frugal guy like me, that hurt! Just now looked it up. It's $76. Is that what you paid? Due to peer pressure (pssst...), I started to tiptoe into Wellesley and Wellington 4 years ago, by making annual IRA contributions for my wife. I opened an account with Vanguard for that purpose to avoid the high fee.

Yeah, that's about right, and it hurts, but I made a large purchase and I rarely if ever sell. My Vanguard account is a Roth so that was not an option this time around.

[RE2Boys]

UPDATE 1-Vanguard closes Wellington Fund to many new accounts | Reuters

[bUU]

I'm finding the door closing recently on a lot of funds that I've either recently gotten into or was considering. I'm not sure if the prevalence of fund closing has increased, or I'm just getting better at picking funds that for some reason get closed to new investors.

[gozer]

Quote:

I'm just getting better at picking funds that for some reason get closed to new investors.

The reason they close funds is that they become too large to manage if they don't. Fidelity Magellan is a text book example of that. When it was a light and nimble speed boat, it did very well. Almost ridiculously so. It blew away the S&P 500 many years in a row. Then it turned into the Titanic and became so bloated that it could no longer navigate well and became an over priced fund that under performs compared to the S&P 500. This is one of the reasons I stick with the basic index funds. Today's star funds, too often become tomorrows dogs.

When I look at the Wellington prospectus, it looks more like an index stock fund that is tied with a pretty sweet actively managed bond fund. Low cost and nice performance. But I only did 15 minutes of research. I'm sure many here know a lot more about it than I do.

We rolled my wife's 401k into a Vanguard IRA this week. She ER'd a couple weeks ago. 5 months more for me. But anyway, this increased our holdings with Vanguard. The service guy handling the rollover pointed out our new service level and that we now qualify to invest in select closed funds. So I guess closed has many levels; can't invest outside, can't invest inside and you're special we'll let you in even though it's closed to inside investors.

[bUU]

Quote:

Originally Posted by gozer The reason they close funds is that they become too large to manage if they don't.

What I noted though is that it is happening to me more often than it had during the earlier portion of my investing life. Maybe it is just because I'm investing more, but it doesn't seem like that to me.

Quote:

Originally Posted by gozer When I look at the Wellington prospectus, it looks more like an index stock fund that is tied with a pretty sweet actively managed bond fund. Low cost and nice performance. But I only did 15 minutes of research. I'm sure many here know a lot more about it than I do.

I hope you're right because that's exactly why I chose it.

[Brat]

My experience is that when a fund is closed it has already gotten to big to continue historic returns.

Most of our IRA funds are in Wellesley, I have been considering tipping our bond ratio to be more like Wellington. We are in the middle of a transfer from Fidelity to Vanguard, hum....

[NW-Bound]

Any bet that Wellesley will be closing next?

[NW-Bound]

Quote:

Originally Posted by gozer When I look at the Wellington prospectus, it looks more like an index stock fund that is tied with a pretty sweet actively managed bond fund. Low cost and nice performance...

I do not know about Wellington bond holdings, but regarding its equity portion, it's not indexed. The latest data shows that relative to the S&P 500, it overweights in financial services (banking) and the health care sector, and underweights in technology.

I think the above has always been true with conservative funds, including the ones outside of Vanguard. They tend to stick with dividend-paying stocks, and shy away from growth stocks. Not to say that's good or bad, but that's just their philosophy. Avoidance of growth stocks (read technology) saved them from the crash of 2000-2003.

Note that the overweight in financial sectors hurt many royally in the 2008-2009 market rout. There's no free lunch.

Disclosure: I have owned Dodge & Cox Balanced for a long time (one that got hurt bad in 2008-2009 due to banking stocks), and added Wellington and Wellesley on the rebound of the Great Recession.

[W2R]

Quote:

Originally Posted by braumeister My understanding is that it's only closed to those buying through other sources. If you're using a Vanguard fund account you can still get in. Anyone know if that's right or not?

Yes, I just bought $10K of Wellington less than an hour ago. I have never owned that fund before.

[Redbugdave]

Quote:

Originally Posted by NW-Bound Any bet that Wellesley will be closing next?

I agree with you NW. The money has got to go somewhere else and that would be a good pick.

W2R...You did the right thing. Better to come in out of the rain than left standing in the yard...

[NW-Bound]

Quote:

Originally Posted by Redbugdave I agree with you NW. The money has got to go somewhere else and that would be a good pick...

Buy, buy, buy ...


Wait a minute. Everybody and his neighbor are buying. Shouldn't I be selling?

[oldtrig]

guess a lot of baby boomer's are taking money out of the mattress with the economy doing better

You are kidding ? Where is the economy getting better? Not where I live unless you think $8.00 an hour jobs is progress. This baby boomer (1947) is still sticking with cash. I will stay as far away from the stock market as I can. Its just a matter of time before a correction and I think most know that. oldtrig