If it is a solo401 k, does the bracket matter?
Alteratives to Wellington?
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If it is a solo401 k, does the bracket matter?
Gotadimple
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I'm not familiar with the Sortino ratio, but in looking at the correlation per centage, Wellington is only 90% correlated to the US Market. An instant x-ray at Morningstar shows Wellington holdings as 91% in the US and Canada, 5.51% in Europe and other smaller amounts in the rest of the world. So ultimately at least 10% of Wellington is in International companies. Maybe accounting for the lower volatility?
- Rita
NW-Bound
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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To compare Wellington (VWENX) with its passive-indexing Balanced Index (60/40) counterpart (VBIAX), I make the following plots using Morningstar. I also throw in Wellesley (VWIAX) and the 100% stock VFIAX.
For the last 10 years, one can see that the more bond one has, the better to survive the financial meltdown of 2008-2009. The difference between Wellington and Balanced Index is slight.
To see the longer-term performance, I went back to 1996. One can see very clearly the nature of the management style of both Wellesley and Wellington. Both are conservative, and avoid the high P/E stocks. Hence they trailed the market badly, and even lost money in the last 90s when the market went gangbuster. The revenge came later when the S&P crashed hard in the tech and dot-com meltdowns of 2002-2003.
So, if you hold these funds, expect to trail the market when things get frothy. However, this does not come along very often.
PS. Note how Wellesley is losing its edge in the last 3 years, most likely due to its bond. Will that continue? That's the question each of us has to answer for himself.
For the last 10 years, one can see that the more bond one has, the better to survive the financial meltdown of 2008-2009. The difference between Wellington and Balanced Index is slight.
To see the longer-term performance, I went back to 1996. One can see very clearly the nature of the management style of both Wellesley and Wellington. Both are conservative, and avoid the high P/E stocks. Hence they trailed the market badly, and even lost money in the last 90s when the market went gangbuster. The revenge came later when the S&P crashed hard in the tech and dot-com meltdowns of 2002-2003.
So, if you hold these funds, expect to trail the market when things get frothy. However, this does not come along very often.
PS. Note how Wellesley is losing its edge in the last 3 years, most likely due to its bond. Will that continue? That's the question each of us has to answer for himself.
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As mentioned earlier on this thread, we own Both Wellington and Wellesley funds because of Wellington management. We've owned Wellington since we started investing (a very long time now). I used to do a lot of hands on index investing, but since retiring - have made Wellington and Wellesley the workhorses of our taxable accounts. This is primarily due to both funds paying out a decent dividend income vs. most everything else that's similar in nature.
We've lived off those dividends since retiring early at 58/57 - 7 years now). We use apprx. 60% Wellington and 40% Wellesley to achieve a 52/48 stock/bond scenario. This is our version of a relatively hands off approach to investing. Quarterly dividends go to our bank account electronically. There is no rebalancing required of us. I've said this before - where else can one get professional active management of a stock/bond portfolio for .18% (admiral level). I have always thought that balanced funds are the most overlooked investing avenue for a simplified hands-off management scenario.
I look to Wellington mgt. and Vanguard to "stay the course" which will provide my DW with steady income with this somewhat autopilot scenario after I'm gone. She has no interest in managing our finances unfortunately. I do have a little concern that Vanguard appears to be changing things that are not to my liking. As some others are discussing on another thread currently, we've had several Flagship advisors over the years, but haven't corresponded with any of them. First off - Vanguard is an index tilted investment company. Wellinton and Wellesley really don't fit the mold. We'd get Total Stock Market, Total International Stock, and Total Bond Market portfolio suggestions from our advisor as per others comments here of their reviews. They do offer Personal Advisor services for as little as .3% of portfolio to keep your index funds on target (rebalanced)..... I find they are becoming annoying lately with the PAS push.
Only fund I considered close to Wellington over the years was Dodge and Cox Balanced Fund. I did own it early on, but got out when I thought they made some unwise moves in the last downturn. I wasn't the only one who felt this way and that fund suffered outflows since. VG Balanced fund is nice but I feel it has too much government bonds exposure for my liking (and no real international exposure).
We've lived off those dividends since retiring early at 58/57 - 7 years now). We use apprx. 60% Wellington and 40% Wellesley to achieve a 52/48 stock/bond scenario. This is our version of a relatively hands off approach to investing. Quarterly dividends go to our bank account electronically. There is no rebalancing required of us. I've said this before - where else can one get professional active management of a stock/bond portfolio for .18% (admiral level). I have always thought that balanced funds are the most overlooked investing avenue for a simplified hands-off management scenario.
I look to Wellington mgt. and Vanguard to "stay the course" which will provide my DW with steady income with this somewhat autopilot scenario after I'm gone. She has no interest in managing our finances unfortunately. I do have a little concern that Vanguard appears to be changing things that are not to my liking. As some others are discussing on another thread currently, we've had several Flagship advisors over the years, but haven't corresponded with any of them. First off - Vanguard is an index tilted investment company. Wellinton and Wellesley really don't fit the mold. We'd get Total Stock Market, Total International Stock, and Total Bond Market portfolio suggestions from our advisor as per others comments here of their reviews. They do offer Personal Advisor services for as little as .3% of portfolio to keep your index funds on target (rebalanced)..... I find they are becoming annoying lately with the PAS push.
Only fund I considered close to Wellington over the years was Dodge and Cox Balanced Fund. I did own it early on, but got out when I thought they made some unwise moves in the last downturn. I wasn't the only one who felt this way and that fund suffered outflows since. VG Balanced fund is nice but I feel it has too much government bonds exposure for my liking (and no real international exposure).
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Newventurer
Recycles dryer sheets
I discovered the same thing at the end of last year and my research, think maybe it was on Bogleheads site, led me to VGSTX.
Returns on VGSTX - YTD (bought about 1/20/16) have been 12.76% and on VWINX are 6.58% (bought 12/15/15)
So far VGSTX seems to be a good complement to VWINX in times like this with bond returns in reverse.
See post 30 of this thread. Wellington is apparently still available to Vanguard clients.
As of 12-16-16
YTD Star VGSTX is 6.43% Exp .34% (no Admiral funds) "Fund of Funds"
YTD Wellesley is 7.56% Exp .23% (Admiral is .16%) - 38/62 stock/bond
YTD Wellington is 11.23% Exp is .26 (Admiral is .18%) - 66/34 stock/bond
Star 63/27 stock/bond (heavier short term investments) is not quite Wellington - Star's funds are more growth than value oriented.
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Newventurer
Recycles dryer sheets
I don't believe this is true if buying through a 3rd party, which would be my preference.
exnavynuke
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Vanguard clients can buy in through their Vanguard accounts. If buying through a 3rd party, you wouldn't be buying as a Vanguard client but as a client of a 3rd party and it is not available through 3rd parties. If you want in, gotta get in through Vanguard it seems.
nun
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I just wanted a single 60/40 fund and picked Vanguard Balanced Index over Wellington because the fees are a bit lower. The graphs above show that the two funds give very similar returns. I don't worry about tax as it's all tax deferred so whatever fund I have the withdrawals will be taxed at my marginal income tax rate.
