Wellesley underperforming?

Absolutely agree when it comes to equity index funds vs. managed funds. But I was under the impression that this is not the case for bond funds. I remember reading some threads here and on the Bogleheads forum years ago about how managed bond funds can be preferable to index funds due to the price/interest-rate relationship.

If that were true, there would be numerous bond funds that consistently beat the index, and nobody would index funds.
 
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scratch golfer

After I saw 2023's EOY performance, I sold all my and my wife's VWINX in our Roth Ira's and bought VFIAX at the start of 2024, which worked out well. I'm not going back.
Certainly the right move for 2024. A very large part of the VFIAX performance derived from the "magnificent 7". I'm old enough to remember the time of the "nifty fifty" that did not end well. Of course, maybe this time it is different, one never knows.

VWINX is simply a defensive long term holding that will only outperform VFIAX when there is a protracted major bear market and that is only coming off a period of "normal interest rates". Any fund holding large portion of bonds in our recent low interest rate time period would get a good spanking as those rates reverted to more normal levels. A comparable fund might be Vanguard's own Target Retirement Fund VTINX composed of all index funds including international stock and bond holdings. It got spanked even harder than VWINX during the aforementioned period. I hold both VWINX and VTINX in my IRA, VFIAX in my taxable.
 
Seems you would need two benchmarks. One for the Bond part and one for the Equity part of the fund.
 
I held Wellesley and Wellington for what I call my 'lost decade' from around 1993-2003. Finally, I ditched ' after missing out on market average returns. I didn't understand real risk [that Wellesley would underperform even with relation to inflation] vs. reward. Now, I'm all in with VOO, VTI and VUG, and finally sold my BND.
 
I held Wellesley and Wellington for what I call my 'lost decade' from around 1993-2003. Finally, I ditched ' after missing out on market average returns. I didn't understand real risk [that Wellesley would underperform even with relation to inflation] vs. reward. Now, I'm all in with VOO, VTI and VUG, and finally sold my BND.

I sold most of my bond funds right after the initial raising of rates, and lost about 1%. I had to force myself to do it since I was "down." I would credit @pb4uski with his relentless math outlining the effect of interest rates on bond funds for that. For some reason I missed 10 shares of BND, in one of my brokerage accounts, and that is down 13% (not a big deal since it's such a small percentage). I do have a little Wellington, which has done ok for me but "nothing to write home about." I was late on the VUG/ SCHG train, but am trying to dollar cost average into growth.

Wellington performance screen shot:

1738589262981.png
 
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