I remember spending a morning looking through the vanguard funds when I first started looking at them. Decided on the Wellesley fund as a core holding and wellington as a little extra 'juice'. About the minute after I finished reading 37,000 pages of very exciting crud I found an interesting article on the history of mutual funds that had a lot of highlighting on wellington, fair considering its one of the oldest (if not THE oldest) mutual fund. Apparently there is a long running "old money" strategy to invest in wellington and the wellesley fund may have been created for wellington investors to start making their money more conservative while maintaining the same investment principals. The "old money" (whatever/whoever that is exactly) ends up with some sort of split between the two at retirement.
Sounded like a bit of a marketing play to make people want to emulate the "old money", but it made for a nice story.
I had a hard time struggling with the index/active thing, but that I was getting < .20 ER on the wellesley admiral shares took away one of the objections to active funds. Low turnover that wasnt much different from an index and therefore good tax efficiency took away another. That wellesleys 10+ year track record was better than or in line with other balanced funds that charged more and performed more poorly while those other funds also held a lot more equities and had a lot more volatility was also in the funds corner. No sequential losing years. No double digit losing years. SWR friendly 4%+ yield. Historic returns that matched an SWR and the average annual rate of CPI reported inflation.
That having been said, the large cap value stocks and shortish intermediate bonds have done well over the last decade or two, and the combination has been a winner...somewhat higher returning but volatile equities in a smaller dose, ballasted by a big lump of fairly steady and decent returning bonds.
A long term bear market in bonds coupled with a return of Growth to favor, might make the fund a poor returner for a while. But of all the funds out there, this one might be the most "good sleep worthy".
I dont know if I'd hold a lot of this fund if I was a young person, unless i was a very conservative investor. A lot of the yield is taxable (ok in an IRA/401k) as unqualified dividends. For long term holding periods a higher equity component is warranted (which wellington has). But for in-ER holders, its a good place to stop. If you're worried about really long term ER's holding up to inflation, you can do what I did...take Wellesley as your core taxable holding, and fill your IRA with racy stuff like small cap value, international small cap, emerging markets, reits, healthcare, energy, etc. Let those simmer and rebalance them for 20 years until you get to 'real' retirement age...