Pssst! What else?

[target2019]

I'm not familiar with Wellesley, but googled it and see that it is an income fund. If you're focused on dividend income, everyone seems to be talking about SCHD (but it's all stocks, no bonds).

Pssst! SCHD.

 

[24601NoMore]

I wonder how much manager changes in the past couple of years has affected recent Wellesley performance.

Really can't compare/base expectations of future returns against the long term performance of Wellesley (which I also own a good chunk of) as the people responsible for that performance (Reckmeyer on the equity side and Keogh on the fixed income side) have been gone since mid 2022 and mid 2021 respectively.

New managers (Matthew Hand on equity and Loren Moran on FI) worked for a while alongside the gurus who steered Wellesley through thick and thin, but obviously are different people.

Time will tell, but VWIAX is in the bottom 4% of performance YTD (2.15% vs 5.34% Category average) and bottom 12% (2.5 vs 4.77%) 1 year. 3 year isn't a lot better with 2.83 vs 3%. You have to go out 5 years to get category beating returns (4.89 vs 3.6). Goes without saying that the interest rate environment was much different then, and presumably will continue to be different for the foreseeable future, which will weigh heavily on Wellesley with 61% current portfolio in Fixed Income..

I also own SCHD which is of course a much different beast, being a pure equity fund - albeit, one focused on dividend paying stocks. Interestingly, it's yield is currently .4% over VWIAX's even though VWIAX is 60+% bonds. It's YTD #s also aren't good, being down 1.57%. 1 year has underperformed (by 5+%). 3, 5 and 10 year returns have been better and beat Category averages solidly.

 

[dobig]

Keep in mind that long duration low coupon treasury's are the "kryptonite" that have sunk some banks this year. Many funds are loaded with far more of that than banks. Many long term low coupon treasury's are trading at 50-60 cents on the dollar. When a fund is in a forced selling mode, due to redemptions, the loss from the sale of that security is realized and there is no recovery of that security back up to par. That capital is gone forever. Before you put new money into a fund, look for the red flags like a low average coupon relative to current yields or high levels of unrealized losses, and a wide disparity between the reported SEC yield and distribution yields. Don't be led off a cliff with all the other lemmings. Fixed income investing is all about math.

Freedom has been repeating this for well over a year. Those who listened were saved from huge losses in bond funds.


Too bad it couldn't have been made a sticky.

 

[Freedom56]

Freedom has been repeating this for well over a year. Those who listened were saved from huge losses in bond funds.


Too bad it couldn't have been made a sticky.

For those who claim that individual bond holders have the same problem, I would like to inject so common sense and reality into that discussion. An individual bond holder with an ounce of common sense is going to lock a coupon of 1.25% for 30 years at par or above like these bond funds have. They are also unlikely to buy 10 year notes with .6% coupons like these bond funds have. When yields drop to zero, individual bonds holders climb the risk ladder (high yield bonds, preferred stocks) looking for yields and keep durations short.

 

[eytonxav]

How about psst Wellington?

 

[Koolau]

How about psst Wellington?

For several years, we added Wellington. It's sort of the "reverse" of Wellesley (roughly 60/40 rather than 40/60.) For some reason, we decided on all Wellesley and haven't changed it for a long time. YMMV

 

[Al18]

Fidelity Balanced FBALX is a 60/40 fund that typically has better results than Wellington. If you like Dividend Aristocrats, then NOBL is a great fund. Dividend Aristocrats are the 62 companies in the SP500 who have increased their dividends for at least 25 consecutive years.

 

[eytonxav]

Fidelity Balanced FBALX is a 60/40 fund that typically has better results than Wellington. If you like Dividend Aristocrats, then NOBL is a great fund. Dividend Aristocrats are the 62 companies in the SP500 who have increased their dividends for at least 25 consecutive years.

FBALX tracks closely with VWENX, but Wellington does outperform according to Morningstar chart overlay.

 

[PatrickW]

How is it possible that Wellesley has a 5 star rating...? That makes me doubt the veracity of the ratings.

Instead of "Pssst! Wellesley!", it should be "Wellesley...? Pfffft!".

 

[COcheesehead]

How is it possible that Wellesley has a 5 star rating...? That makes me doubt the veracity of the ratings.

Instead of "Pssst! Wellesley!", it should be "Wellesley...? Pfffft!".

Different classes?

 

[target2019]

There isn't a universal rating system. Sites can put together whatever methodolgy they want.

 

[COcheesehead]

There isn't a universal rating system. Sites can put together whatever methodolgy they want.

The standard is Morningstar ratings.