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Old 12-16-2016, 09:02 PM   #21
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I'm probably the only won who didnt know this but I guess Vanguard Wellington is closed to new investors. Anyone have any good alternatives that are similar?
A good alternative would be 65% VEIPX Vanguard Equity Income Fund which is also managed by Wellington and 35% CD ladder. If this is new money going in monthly 65% VEIPX and 35 BND or 65% VTI and 35% bnd is fine. Right now I would think twice about dumping a large amount into any bond fund. I would wait until the dust settles on interest rates. A cd ladder will most likely outperform bond funds in the near future.
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Old 12-16-2016, 09:23 PM   #22
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Just looking at Morningstar, the earliest I can go back for all 3 funds VBMFX (bond), VTSMX (stock), and VWENX (Wellington Admiral) is 1993.

A $10K invested would become $34,700 for VBMFX, $82,800 for VTSMX, and $88,100 for VWENX. Wellington has the same or better long-term growth than total stock, yet with much lower volatility.

Note how Wellington trailed behind the total market in the late 90s, as its managers shunned the techs and dotcoms. But then, that saved it from the tech crash of 2000-2003. Also note the better performance during the financial crisis of 2007-2009.

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Old 12-17-2016, 05:53 AM   #23
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And I thought that was the whole point of the fund: To achieve comparable gains with lower volatility. No?
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Old 12-17-2016, 08:08 AM   #24
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I recently opened a solo401k and had to decide how to invest the money. I wanted to keep it simple and just have one fund so went with Vanguard Balanced Index (VBINX) and stopped worrying.
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Old 12-17-2016, 09:54 AM   #25
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I recently opened a solo401k and had to decide how to invest the money. I wanted to keep it simple and just have one fund so went with Vanguard Balanced Index (VBINX) and stopped worrying.
That is a good choice in the upper tax brackets. Wellington would be good in the lower tax brackets.
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Old 12-17-2016, 10:37 AM   #26
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That is a good choice in the upper tax brackets. Wellington would be good in the lower tax brackets.
If it is a solo401 k, does the bracket matter?
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Old 12-17-2016, 12:43 PM   #27
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Here's a look back to 1987 comparing:
-- "Portfolio 1" : 66% VFINX (Vgd S&P 500)/34% VBMFX (Vgd Total Bond Index) (rebalanced annually)
-- "Portfolio 2" : 100% Wellington

Fairly similar performance, and with the Admiral class shares available today, it's possible that the homebrew index portfolio would have a higher ending balance than the Wellington portfolio. But, that still just takes us back 30 years, which might still miss some dramatic opportunities for Wellington to set itself apart.

Note: The higher Sortino ratio of the Wellington portfolio indicates it had better performance when adjusted for downside volatility compared to Portfolio 1.
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?

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Old 12-17-2016, 05:08 PM   #28
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Wellington is actively managed. Obviously they own lots of large company stocks but the stock portion doesnt mimic the SP500. They can also vary their stock and bond percentage when they see fit.
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Old 12-17-2016, 07:20 PM   #29
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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.

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Old 12-18-2016, 10:15 AM   #30
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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).
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Old 12-18-2016, 01:04 PM   #31
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I'm probably the only won who didnt know this but I guess Vanguard Wellington is closed to new investors. Anyone have any good alternatives that are similar?
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.
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Old 12-18-2016, 01:30 PM   #32
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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.
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Old 12-18-2016, 01:36 PM   #33
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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.
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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Old 12-18-2016, 01:56 PM   #34
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See post 30 of this thread. Wellington is apparently still available to Vanguard clients.
I don't believe this is true if buying through a 3rd party, which would be my preference.
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Old 12-19-2016, 07:03 AM   #35
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I don't believe this is true if buying through a 3rd party, which would be my preference.
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.
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Old 12-19-2016, 07:57 AM   #36
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If it is a solo401 k, does the bracket matter?
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.
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