Out Of Wellesley?

[yakers]

Yes, the shares are Admiral class. I like the analysis compared to the VG TR fund, this is the kind of insight I was looking for, but as my main fund is in a TR type account I don't see a reason to change out DW's Wellsley for a TR fund. But that is some good thinking. It is easy to be happy with Wellesley when it is going down less than other funds and less than the market and when the dividends come in. But investing is a bit bigger than that and I need to keep an open mind when I am feeling most complacent.

Quote:

Originally Posted by Olav23 Do you have Admiral Shares of Wellesley? If not, if you don't have a capital gain built up in Welly, I think it is a no-brainer to move to the Vanguard Target Retirement Income fund. Here is why I would make the decision: Expense ratio (assuming non-admiral shares): TR: .19% Well: .25% Current Yield: TR: 4.03% Well: 4.79% (so, both get close to the magic 4%) Asset mix: TR: 70% bonds/30% stock Bonds diversified into 20% tips, 45% total bond, 5% prime money market Bond average credit quality: AAA (95% rated A or above) Stock: 24% Total US, 6% international and emerging mkts Average market cap: $27b (smaller market cap, so less stock allocation needed for equity returns) Well: 63% bonds/37% stock Bonds un-diversified: 294 bonds Bond average credit quality: AA (85% rated A or above) Stock: only 52 stocks! (non-diversified) Average market cap: $46.5b Returns: (to aug-31) TR: 3-year pre-tax: 4.4% Well: 3-year pre-tax: 4.23% TR: 3-year post-tax: 3.05% Well: 3-year post-tax: 2.62% So, even in tax-efficiency, TR Income beats out Wellesley. Trailing Returns, 1-yr to today: TR: -4.23% Well: -6.72% Personally I know what choice I would make, mainly due to the lower credit quality of Wellesley, the smaller market cap of TR Income and the more diversification TR Income offers. But it is your judgement call! If you want to compare all the stats: Vanguard Target Retirement Income Report (VTINX) | Snapshot Vanguard Wellesley Income Report (VWINX) | Snapshot

[cute fuzzy bunny]

I think you can tell the outcome of an analysis of two funds, one with a higher stock component than the other, over the past 3 years without reading any statistics.

Looking at the ten year returns on wellesley vs lifestrategy income (since TR income doesnt have a ten year track record), wellesley picks up almost a full percentage point per year in returns. Thats a lot.

That having been said, I've often recommended that people interested in "this kind of fund" buy equal amounts of LS income, TR income and Wellesley. They really do invest rather differently and in rather different approaches. Two of them have fairly decent long term results and theres no reason to expect TR income to do badly.