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Anyone concerned of Wellesley fund given the recent bond volatility
Old 03-27-2020, 11:25 AM   #1
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Anyone concerned of Wellesley fund given the recent bond volatility

I am retired and has 33% bond allocation, most of the bond is in Wellesley fund. The fund holds AAA, AA, A, BBB and other securities, given the market volatility and economy recession, I am concerned of default with some securities with grade A and BBB and others.
Wellesley is well liked on this forum, I was wondering if I worry too much. Am I alone here? any thoughts?
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Old 03-27-2020, 11:32 AM   #2
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Not concerned that much about Wellesley. It has a very good history.

Dodge & Cox Income (DODIX), OTOH, has me concerned. Just like in 2008, DODIX is getting whacked hard right now. It has done well for us in the period between 2008 and a month ago, but the last couple of weeks has been downright ugly with that fund.
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Old 03-27-2020, 12:06 PM   #3
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I have a considerable portion of 90 yo DM's portfolio in Wellesley. It's behaving as I would expect in this market. I also need to add she also has an IT Treasury fund to even out the already conservative Wellesley.

I can't tell from your post, but you do realize Wellesley is composed of about 35-40% equities? IMHO a bigger concern than the managed bond holdings.

However, all things considered, we're definitely not making any changes.
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Old 03-27-2020, 12:16 PM   #4
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Here's a list of their bond holdings: https://investor.vanguard.com/mutual...folio-holdings

In looking at the first two pages (biggest $ holdings), there appear to be a lot of treasuries and perhaps quite a few financial institutions.

If the market collapses (like a great depression kind of collapse), some of these will be hit -- but I would expect a lot worse in my other equity holdings.
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Old 03-27-2020, 12:34 PM   #5
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...I was wondering if I worry too much.
I don't know the answer to your question but as a retired guy with a large chunk of Wellesley in my portfolio I continue to be pleased at how it has performed so far during the covidaster. I have no plans to make any changes.
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Old 03-27-2020, 08:57 PM   #6
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I'm using monthly withdrawals from our taxed Wellesley fund to pay our mortgage. Im thinking of cashing enough of it to pay off the house (3.25%), then start dollar cost averaging into it again. Im not currently needing it to live on.

With a different house in 08 I paid it off early in the crisis, licked my wounds and started averaging into Wellesley. Smaller numbers then, but in a few years my numbers were sweet.
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Old 03-27-2020, 10:24 PM   #7
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My understanding is that the Fed is literally buying corporate bonds now. So I wouldn't worry too much I guess. The Fed is going to backstop the bonds from falling in value.
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Old 03-28-2020, 07:32 AM   #8
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My understanding is that the Fed is literally buying corporate bonds now. So I wouldn't worry too much I guess. The Fed is going to backstop the bonds from falling in value.
The Fed's magic money machine. I wonder if they sell a home version of that.
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Old 03-28-2020, 07:54 AM   #9
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Other than the dividends and RMD placed in a MM tIRA account that came from Wellesley and Wellington we have all our tIRAs in those and feel comfortable with both of them.


Cheers!
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Old 03-28-2020, 07:55 AM   #10
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I wouldn't say that the wellesley has behaved expected in the past 4 weeks. While sp500 at lowest-3/20 was at 2016 level, and wellesley was at 2012 level.

Yes, Fed is step in to buy certain bonds for a temporary relief but, covid-19 is still escalating and unemployment is going up in a record speed, how long can fed buying and sustained?
that being said, the economy was already wobbly before the covid-19, this economy down turn only bring the worst of it.

Wellesley contains 10% government bond; 5%muni bond; 66%corp bond and 15%securitized bond.
I think Fed isn't buying corp bond.

Most of us cheered wellesley and benefited from wellesley for as long as I remember, we enjoyed its dividends and no complains.
I am not here to advocating anything negative but to put my concerns on the table and hope someone can convince me that all is ok.

I am retired and 1/3 of my portfolio is in wellesley, it is a legitimate concern.
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Old 03-28-2020, 08:06 AM   #11
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I am not here to advocating anything negative but to put my concerns on the table and hope someone can convince me that all is ok.

I am retired and 1/3 of my portfolio is in wellesley, it is a legitimate concern.
I'm not sure anyone can provide enough information to convince you all is ok. None of us know the future, all we know is the past.

If I was uncomfortable with Wellesley I would move my funds elsewhere. Maybe that's what you should do if your concern is keeping you up at night.

Problem is, I don't know what investment would be any better.
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Old 03-28-2020, 09:49 AM   #12
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It's a challenging time for most of us and I hear your concern. As Rewahoo suggested, you may consider a different place for your funds.
I'm sticking with my AA and current plan (it includes some Wellesley) Good luck with whatever you choose.
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Old 03-28-2020, 10:06 AM   #13
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Wellesley has been about 1/3 of my investable assets since I ER'd 18 years ago. I see no reason to change at this time particularly since the Fed's magic money machine has an unlimited supply of funds to prop up any security it wants to. And when (if) inflation takes off I suspect Wellesley managers will be at least as good if not much better than I would be at picking investments that would keep up with that inflation.
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Old 03-28-2020, 11:57 AM   #14
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I suspect Wellesley managers will be at least as good if not much better than I would be at picking investments that would keep up with that inflation.
When Trump was elected I feared the economy would get goofy. I thought a light touch of active management might be beneficial. I'd been indexing, and moved into Wellington and Wellesley for just this reason.
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Old 03-28-2020, 12:04 PM   #15
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I don't know the answer to your question but as a retired guy with a large chunk of Wellesley in my portfolio I continue to be pleased at how it has performed so far during the covidaster. I have no plans to make any changes.
+1

I am 100% retired with a portfolio that is 30% Wellesley. I am happy with it and look forward to Wellesley dividends each quarter.

It is $60.08/share right now, whereas back on 3/9/2009 it was $39.03/share. Not that I care; I am a buy-and-hold investor and simply like the dividends.
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Old 03-28-2020, 05:55 PM   #16
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When Trump was elected I feared the economy would get goofy. I thought a light touch of active management might be beneficial. I'd been indexing, and moved into Wellington and Wellesley for just this reason.

how has it turned out?



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It is $60.08/share right now, whereas back on 3/9/2009 it was $39.03/share.

have the dividends per share gone up in that time?
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Old 03-28-2020, 05:58 PM   #17
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how has it turned out?

have the dividends per share gone up in that time?
Info on Wellesley's performance is available at Vanguard.com.
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Old 03-28-2020, 06:09 PM   #18
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how has it turned out?






have the dividends per share gone up in that time?
Honestly couldn't tell you the numbers. On my most important scale, How well does Keim sleep at night?, it has outperformed.
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Old 03-28-2020, 06:10 PM   #19
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I have no plans to reduce my holdings in Wellesley or Wellington. These 2 funds make up 6% of my portfolio. I hold mostly indexed funds but like to have a few managed funds.
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