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Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 2:23 pm
by crystalbank
Hi all,

Currently, I have a Solo 401k setup with Vanguard and this year I'm looking into moving away from Vanguard to a Solo401k provider that provides the capability to make Mega backdoor roths (eg DiscountSolo401k etc, still looking). It seems most of them setup their accounts with Fidelity which is fine with me.

But, currently a significant portion of the 401k is invested in Vanguard's Wellington Fund. This is fund is only open to investors using Vanguard brokerage services. I'm a huge fan of this fund and I'm curious if I can still contribute to this fund even after rolling the account over to Fidelity? My holdings will be transferred to Fido so what happens after the rollover? Do they become 'locked' to prevent further purchases? What about dividends?

Yeah, I know that there are ways to track the performance of Wellington using a combination of index funds, but I would rather just stick with Wellington if possible.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 2:29 pm
by cuendillar
Typically 401k plans are tied to the employer- if you leave an employer you can leave money in a the plan, but you cannot continue to contribute (the contributions come directly from the pay check, which you are no longer getting). An option if you want to stay with a given provider is to see if the new employer offers the same provider with the same options, or see if you can roll the 401k moneys into another plan (e.g. IRA) with the same provider to continue using that provider. Hopefully that made sense.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 2:34 pm
by fabdog
When I am on Fidelity's website, Wellington comes up as a transaction fee fund ($75) and closed to new investors.

I'd call Fidelity and ask if you'll be allowed to purchase more if you bring in shares, or will they even reinvest dividends/cap gains for you.

If you can purchase more, it will be $75 each time you buy

Mike

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 4:15 pm
by crystalbank
fabdog wrote:
Thu Jun 06, 2019 2:34 pm
When I am on Fidelity's website, Wellington comes up as a transaction fee fund ($75) and closed to new investors.

I'd call Fidelity and ask if you'll be allowed to purchase more if you bring in shares, or will they even reinvest dividends/cap gains for you.

If you can purchase more, it will be $75 each time you buy

Mike
Thanks for the info. I'll try contacting Fidelity eventually but am curious if anyone has prior experiences here. $75 is quite a lot!

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 4:43 pm
by crystalbank
Ok, just contacted Fidelity rep. Good news is that I can continue to invest in the Wellington Fund. But bad news is that I need to pay $75 transaction fee.
Tough call!

Dividends will be reinvested without incurring fees though.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 4:50 pm
by 123
crystalbank wrote:
Thu Jun 06, 2019 4:43 pm
Ok, just contacted Fidelity rep. Good news is that I can continue to invest in the Wellington Fund. But bad news is that I need to pay $75 transaction fee.
Tough call!

Dividends will be reinvested without incurring fees though.
I've taken that fee hit at Schwab and Fidelity for buying Vanguard funds. If you're making a very large purchase it becomes immaterial. If you expect to accumulate more shares as time goes on another option is to use an alternate fund as an interim investment and then periodically switch that over to the Vanguard fund. Maybe every 6 months, annually, or every couple of years, it all depends on how accepting you can be of that fee.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 5:00 pm
by crystalbank
123 wrote:
Thu Jun 06, 2019 4:50 pm
crystalbank wrote:
Thu Jun 06, 2019 4:43 pm
Ok, just contacted Fidelity rep. Good news is that I can continue to invest in the Wellington Fund. But bad news is that I need to pay $75 transaction fee.
Tough call!

Dividends will be reinvested without incurring fees though.
I've taken that fee hit at Schwab and Fidelity for buying Vanguard funds. If you're making a very large purchase it becomes immaterial. If you expect to accumulate more shares as time goes on another option is to use an alternate fund as an interim investment and then periodically switch that over to the Vanguard fund. Maybe every 6 months, annually, or every couple of years, it all depends on how accepting you can be of that fee.
Yes, investing in an alternative fund through out the year and switching over to Vanguard Fund in one go is what I was thinking too.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 6:19 pm
by FelixTheCat
crystalbank wrote:
Thu Jun 06, 2019 2:23 pm
Currently, I have a Solo 401k setup with Vanguard and this year I'm looking into moving away from Vanguard to a Solo401k provider that provides the capability to make Mega backdoor roths
Can you convert your individual 401K to an individual Roth 401K at Vanguard?

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 6:40 pm
by crystalbank
FelixTheCat wrote:
Thu Jun 06, 2019 6:19 pm
crystalbank wrote:
Thu Jun 06, 2019 2:23 pm
Currently, I have a Solo 401k setup with Vanguard and this year I'm looking into moving away from Vanguard to a Solo401k provider that provides the capability to make Mega backdoor roths
Can you convert your individual 401K to an individual Roth 401K at Vanguard?
I'm not sure. But if I convert i-401k (pretax) to a roth401k wouldn't that incur taxes? Vanguard doesn't allow after tax contributions to 401k. But I can defer wages to a Roth 401k, which is slightly better but still can't do a mega backdoor roth. :confused

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 7:12 pm
by lakpr
You know that Wellington fund is a 65:35 stocks to bonds fund right? Simply invest in the same ratios in Fidelity Total Stock Market Index fund (FSKAX) and Fidelity Total Bond Market Index fund (FXNAX) in a 65:35 ratio, and you duplicate the returns of Wellington fund. There is no magic to it

See below comparison of the two portfolios. You really need to get out a microscope to make out the differences between Wellington and a 65:35 blend at Fidelity

https://www.portfoliovisualizer.com/bac ... 0&total3=0

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 7:18 pm
by Dottie57
crystalbank wrote:
Thu Jun 06, 2019 4:15 pm
fabdog wrote:
Thu Jun 06, 2019 2:34 pm
When I am on Fidelity's website, Wellington comes up as a transaction fee fund ($75) and closed to new investors.

I'd call Fidelity and ask if you'll be allowed to purchase more if you bring in shares, or will they even reinvest dividends/cap gains for you.

If you can purchase more, it will be $75 each time you buy

Mike
Thanks for the info. I'll try contacting Fidelity eventually but am curious if anyone has prior experiences here. $75 is quite a lot!
$75 is the number I have for buying non Fidelity Mutual Funds.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 7:43 pm
by crystalbank
lakpr wrote:
Thu Jun 06, 2019 7:12 pm
You know that Wellington fund is a 65:35 stocks to bonds fund right? Simply invest in the same ratios in Fidelity Total Stock Market Index fund (FSKAX) and Fidelity Total Bond Market Index fund (FXNAX) in a 65:35 ratio, and you duplicate the returns of Wellington fund. There is no magic to it

See below comparison of the two portfolios. You really need to get out a microscope to make out the differences between Wellington and a 65:35 blend at Fidelity

https://www.portfoliovisualizer.com/bac ... 0&total3=0
Sure, the performance is identical in the last 4 years or may be even the last decade. But if you start going back farther Wellington consistently beat standard 65:35 balanced fund with a lot less volatility.
https://www.portfoliovisualizer.com/bac ... 0&total3=0

I'm not saying that Wellington will always produce better result than 65:35, but I would rather invest in it and forget than trying to balance the portfolio myself.

Re: Can I Keep Investing in Vanguard Wellington Even After Rolling Over to Fidelity

Posted: Thu Jun 06, 2019 9:22 pm
by rkhusky
Wellington has large value stocks and mainly corporate bonds. Quite different from total stock and total bond.