Psst Wellesley!

[ejman]

Slowly over many years my AA in Wellesley has increased to where now it is 36% of my invested funds. It just seemed to be an almost subconscious thing, I would sell some other equity fund as my AA went over the limit and the sale proceeds would almost automatically end up in Wellesley until I though of something better and that something better just didn't seem to turn up in my radar screen, so the money would stay there. So a few questions:

1) Anyone else has found their Wellesley exposure climbing like this?

2) How dangerous is it to have a 1/3 + allocation of one's liquid assets to an actively managed fund like this?

3) Wellesley is about 65% or so corporate bonds. At this stage in the cycle does this make sense?

4) So assuming one of REWahoo's proverbial asteroids doesn't come for a visit to rebalance our AA's, If not Wellesley then what?

 

[LakeTravis]

I've got the largest portion of my after-tax investments in Vanguard Wellington. I figure it meets the AA between stocks and bonds that I am comfortable with, and don't personally have an issue with it all being in the same (properly) managed fund.

Especially when it's Vanguard Wellington.

I share your reluctance to get into bonds at this stage of things, but I figure if I'm going to have any exposure to bonds at all the Wellington/Wellesley fund managers know more about those things then I do.

 

[REWahoo]

1) Anyone else has found their Wellesley exposure climbing like this?

Yes.

2) How dangerous is it to have a 1/3 + allocation of one's liquid assets to an actively managed fund like this?

Beats me. Investing always involves some risk.

3) Wellesley is about 65% or so corporate bonds. At this stage in the cycle does this make sense?

See the LakeTravis quote below.

4) If not Wellesley then what?

See #2 above.

I share your reluctance to get into bonds at this stage of things, but I figure if I'm going to have any exposure to bonds at all the Wellington/Wellesley fund managers know more about those things then I do.

 

[kumquat]

You should probably calculate what percentage of your NW, involving Welsley, is in equities or bonds (sorry, FI).

Then figure out the rest of your your AA.

Then decide if it is as problem.

 

[W2R]

1) Anyone else has found their Wellesley exposure climbing like this?

I rebalance my portfolio once a year (or more if necessary), and in the process I get back to my planned 30% Wellesley.

2) How dangerous is it to have a 1/3 + allocation of one's liquid assets to an actively managed fund like this?

Who knows? Personally I don't like having 1/3 or more of my portfolio in anything.

3) Wellesley is about 65% or so corporate bonds. At this stage in the cycle does this make sense?

Not according to the popular media. However Wellington Management has a good track record.

4) So assuming one of REWahoo's proverbial asteroids doesn't come for a visit to rebalance our AA's, If not Wellesley then what?

I'm not thinking of leaving Wellesley. The other 70% of my portfolio includes index funds like total stock market, total bond market, FTSE all-world ex-US, and also TSP G fund which is a government bond fund.

 

[ejman]

Thank you all. I'll stay with my present allocation but I won't be adding funds to Wellesley if and when the next reallocation point comes. And who knows, maybe for the first time ever (for me) the reallocation will be in the opposite direction i.e. from bonds to equities.

 

[Chuckanut]

When I figure my total asset allocation, I look at the ratio of equities to bonds in funds such as Wellesly. I allocated the proper amount to my asset column and my bond column. So, in the end it doesn't matter what Wellesly does. For example, If they choose to go to 90% equities that will be 'corrected' when I rebalance my total portfolio.

 

[rescueme]

I simply plug in my/DW's holdings into M* portfolio X-Ray to get a breakdown of holdings vs. target AA and also FIDO's GPS tool, which will also give you an overall analysis of holdings (FIDO & non-FIDO funds, assuming you use the FIDO Full View option).

Be it in Wellesley (which we are at around 15% combined) or any other fund, it's not what an indivudial fund contains, but what all our funds contain, overall.

We don't get too hung up on one fund.

Anyway, that's our story...

 

[MichaelB]

Thank you all. I'll stay with my present allocation but I won't be adding funds to Wellesley if and when the next reallocation point comes. And who knows, maybe for the first time ever (for me) the reallocation will be in the opposite direction i.e. from bonds to equities.

Sounds reasonable. When in doubt, do nothing.

Reading the many threads on YTD or full year returns over the years it often appears to me that there are many similar results among portfolios with different allocations. The lesson I've taken away from that is sticking to one's approach and not fiddling with the allocations is more important and delivers superior results compared with constantly rethinking the allocation and making changes.

 

[Midpack]

I share your reluctance to get into bonds at this stage of things, but I figure if I'm going to have any exposure to bonds at all the Wellington/Wellesley fund managers know more about those things then I do.

+1, good food for thought (for me at least) as others have noted...

 

[ejman]

Sounds reasonable. When in doubt, do nothing.

Reading the many threads on YTD or full year returns over the years it often appears to me that there are many similar results among portfolios with different allocations. The lesson I've taken away from that is sticking to one's approach and not fiddling with the allocations is more important and delivers superior results compared with constantly rethinking the allocation and making changes.

I'm thinking you are unto something here. Whenever the urge to futz comes on strongly, lay down until it passes. Maybe I read something that set off alarms -who knows? it's passing now thank you all.