Vanguard Wellington and Inflation

[Looking4Ward]

With a majority of my portfolio in Vanguard Wellington, I've been pleased with it's performance over the last 8 years that I've been FIRE'd.

Looking forward, I'm curious how Wellington may do during periods of high inflation and rising rates like we are currently experiencing. We haven't seen conditions like these since the early '80s, so I looked back at how Wellington performed for that decade and the past results seem to indicate it did very well (chart attached).

Would it be unreasonable to think that Wellington has the potential to again fare well during similar economic conditions?

 

[ejman]

Hard to predict. Interest rates were much higher during that period so bond yields were higher and of course, the managers of that period are no longer @ Wellington. Having said that, about 10% of my liquid NW is in Wellington and I have no intention of selling during this period of turmoil.

 

[Koolau]

Hard to predict. Interest rates were much higher during that period so bond yields were higher and of course, the managers of that period are no longer @ Wellington. Having said that, about 10% of my liquid NW is in Wellington and I have no intention of selling during this period of turmoil.

Have to take it on faith that the fund manager(s) know what they are doing. I generally prefer index funds, but here is a chance for a fund like Wellington to shine (or not.) Lots of headwinds for both equities and bonds. If you lose "less" I guess that's a good thing right now. My preference for several years has been Wellesley but have also owned Wellington in the past and had no complaints. What it will do now is anyone's guess so YMMV.

 

[ejman]

Have to take it on faith that the fund manager(s) know what they are doing. I generally prefer index funds, but here is a chance for a fund like Wellington to shine (or not.) Lots of headwinds for both equities and bonds. If you lose "less" I guess that's a good thing right now. My preference for several years has been Wellesley but have also owned Wellington in the past and had no complaints. What it will do now is anyone's guess so YMMV.

Yup, YMMV is right. Wellington has done slightly better than Vanguard's 500 index fund YTD but not nearly as well as Wellesley (all losses though) of course, a 4 month period means nothing.