Wellesley Fund

[meleana]

I’ve been wondering if we should rollover my husbands 401k, which is essentially 100 percent in a stable value fund, into his iRA.

 

[Brangus Baldies]

I have alot in an stable value fund also. Hate to give it up because money market funds will drop eventually.

 

[Hank]

Hi, can you tell me where the charts are from? I didn't see a website link.
Thanks.
Hank

 

[Brangus Baldies]

Charts?

 

[Hank]

Nevermind, I was mistaken.

 

[Badger]

^ This.

With the Fed poised to (maybe) start lowering rates in the not too distant future, I'm doing what I've done with my Wellesley over the past 20 years - holding.

+1 My Wellesley is in my IRA and throws off dividends that are used for RMDs. Since I have other investments in taxable accounts I haven't touched the Wellesley shares. My wife's grown children can have it when we are gone.

 

[Koolau]

Hanging on to our Wellesley. It's a relatively small portion of our AA and just about the only holding of actual "bonds" that we have. I too think it may break out (go back to it's former "glory") and it balances a little bit of my now outrageous equity position of almost 40%!!

 

[target2019]

We'll likely hang on to 5% Wellesley Income in my SEP-IRA for awhile. Wellington Management Co. has to know something about bonds. Lol.

 

[RetireAge50]

I bought Wellesley last March for part of my 10-year spending ladder. CD's at the time were paying over 5%. Wellesley has paid over 8% the last 12 months. So far so good!

 

[mathjak107]

I bought Wellesley last March for part of my 10-year spending ladder. CD's at the time were paying over 5%. Wellesley has paid over 8% the last 12 months. So far so good!

i don’t know what paid means but it has returned 8.75% over the last year and about a 2% return cagr the last 3 years

 

[kevink]

As others have pointed out bailing on Wellesley based on recent returns (and in particular on the simultaneous tanking of equities and intermediate-term and longer bonds in 2022) is probably ill-advised. If nothing else, it's a reminder to understand the duration of one's investments. Wellesley is a ~40:60 blend of corporate bonds with just under 7 years duration and equities which by nature are a 17+ year duration instrument. That means you need to hold other assets (T-bills, money market accounts, possibly shorter-term bond funds) to match spending and rebalancing needs.

Wellesley is an actively-managed fund with narrowly-concentrated assets. It's track record speaks for itself but the future is not the past. I think it's still an excellent core holding but why not diversify across styles? For example, you could have half your long-term holdings in Wellesley and the other half in a "mirror" portfolio of 40% Vanguard Total World Stock Market (VT) and 30% each Vanguard Short Term Inflation Protected (VTIP) and Short Term Treasury (VGSH). The latter allocation is 100% indexed, global on the equity side (Wellesley is essentially all U.S. mid-large cap), while the bonds are all highest quality (offsetting W's total bet on corporates) and shorter-duration (giving you the layered fixed income duration W lacks).

Here's a link to Cullen Roche's excellent paper on duration-matched investing:

https://disciplinefunds.com/wp-content/uploads/2022/08/All-Duration-Investing-1.pdf

 

[Brangus Baldies]

Thanks will take a look at it