All in with Wellesley

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
User avatar
Topic Author
grobertj
Posts: 88
Joined: Fri May 15, 2020 1:02 pm
Location: Greensboro, NC

All in with Wellesley

Post by grobertj »

I'm 66 and retired. Both my wife and I are drawing Social Security. Last month, I paid off my mortgage, so I no longer have any debt. Since mid March, I've struggled to find the right portfolio for me. I explored Vanguard's PAS but I decided it was too cookie cutter and didn't add enough value to warrant a 0.30% fee. After discussions with my Flagship rep, I've decided to invest my total IRA in the Wellesley Income Fund Admiral Shares (VWIAX). I've owned it in the past and was always pleased with the return. While I know that most of you are committed to index funds, I'd prefer to have experts determine the right investments and allocations. Wellesley meets that need. I''ll keep a cash reserve of around 6 months in an Ally Savings Account currently paying 1.0% interest. I''ll withdraw from my IRA to keep the cash reserve whole.

What are your thoughts?
The only constant is CHANGE!!
dukeblue219
Posts: 837
Joined: Fri Jan 29, 2016 12:40 pm

Re: All in with Wellesley

Post by dukeblue219 »

You could do a lot worse. If you can sleep comfortably at night, go for it.

Is it optimal? Not necessarily. But you're not going to end up on the streets like someone who bet their retirement on XYZ single stock.
User avatar
tennisplyr
Posts: 2688
Joined: Tue Jan 28, 2014 1:53 pm
Location: Sarasota, FL

Re: All in with Wellesley

Post by tennisplyr »

I've held Wellesley for a long while and have no complaints. Enjoy your retirement.
Those who move forward with a happy spirit will find that things always work out.
Triple digit golfer
Posts: 5560
Joined: Mon May 18, 2009 5:57 pm

Re: All in with Wellesley

Post by Triple digit golfer »

I think you could do a whole lot worse. Congratulations on finding your perfect portfolio.
User avatar
anon_investor
Posts: 3485
Joined: Mon Jun 03, 2019 1:43 pm

Re: All in with Wellesley

Post by anon_investor »

dukeblue219 wrote: Mon Jul 13, 2020 6:28 pm You could do a lot worse. If you can sleep comfortably at night, go for it.

Is it optimal? Not necessarily. But you're not going to end up on the streets like someone who bet their retirement on XYZ single stock.
+1
User avatar
willthrill81
Posts: 20893
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: All in with Wellesley

Post by willthrill81 »

Good for you for finding an all-in-one fund that meets your needs. There's a lot to be said for simplicity.

Out of curiosity, why are you keeping 6 months' expenses in cash? Wellesley is already 65% bonds.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

My only thoughts:

I'd keep a close eye on any active fund - make sure you read reports, stop in at the library to see what Morningstar has to say, etc.

It's kind of outrageous to criticize PAS for "cookie cutter" portfolios. What exactly is unique about your situation that would warrant a unique portfolio? Even before PAS, when a Vanguard rep would exercise any creativity at all in portfolio construction (and even "strayed" into active fund recommendations!), they were widely criticized here for needless complexity, etc. So now we have all the PAS reps frequently on the same page and recommending a fairly simple portfolio of the same index funds, and we criticize them for being cookie cutter. Seriously, they have to be feeling they can't win.
User avatar
Topic Author
grobertj
Posts: 88
Joined: Fri May 15, 2020 1:02 pm
Location: Greensboro, NC

Re: All in with Wellesley

Post by grobertj »

I didn't mean to disparage the CFPs who execute the PAS. My real point is I wanted use more than index funds, and they made it clear that they ONLY use Vanguard index funds. The CFP was very helpful in guiding me to the decisions I made. In fact, she recommended that I examine actively managed funds to meet my need. I have great regard for Vanguard and all their professionals. Only paying 0.16% for Wellesley is a heck of a deal.

Thanks for the tip on checking Morningstar. I'll get right on it. And thanks to all who responded for your encouragement. This is one great board.
The only constant is CHANGE!!
User avatar
willthrill81
Posts: 20893
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: All in with Wellesley

Post by willthrill81 »

grobertj wrote: Mon Jul 13, 2020 9:24 pmOnly paying 0.16% for Wellesley is a heck of a deal.
It's almost identical to the Vanguard Target Retirement funds' expense ratios, which range from .14% to .15%.
“It's a dangerous business, Frodo, going out your door. You step onto the road, and if you don't keep your feet, there's no knowing where you might be swept off to.” J.R.R. Tolkien,The Lord of the Rings
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

grobertj wrote: Mon Jul 13, 2020 9:24 pm I didn't mean to disparage the CFPs who execute the PAS. My real point is I wanted use more than index funds, and they made it clear that they ONLY use Vanguard index funds. The CFP was very helpful in guiding me to the decisions I made. In fact, she recommended that I examine actively managed funds to meet my need. I have great regard for Vanguard and all their professionals. Only paying 0.16% for Wellesley is a heck of a deal.

Thanks for the tip on checking Morningstar. I'll get right on it. And thanks to all who responded for your encouragement. This is one great board.
You might not have been around for the history, but the Vanguard CFPs took a lot of abuse around here for including (some would say pushing) active funds. So you have to understand how ironic it is that now you're not using them because they won't include active funds in your plan. If I recall at one point Vanguard had produced some research that had concluded that a mix of active and index had some benefit, and in general their CFPs appeared to be acting on that.

Of course a possibly valid criticism of some of Vanguard's planning products is failing to stay the course - or even course-correct gradually.

Incidentally when you say "your Flagship rep", unless maybe you're at a level higher than "regular" Flagship, I'm very surprised you have a dedicated one. And if you're at a higher level than Flagship I'd definitely hesitate to make that large a bet on any one fund.
Last edited by tibbitts on Mon Jul 13, 2020 9:47 pm, edited 1 time in total.
nix4me
Posts: 809
Joined: Sat Oct 13, 2018 9:32 am

Re: All in with Wellesley

Post by nix4me »

It's a great fund. Has stellar history.
UpperNwGuy
Posts: 4106
Joined: Sun Oct 08, 2017 7:16 pm

Re: All in with Wellesley

Post by UpperNwGuy »

grobertj wrote: Mon Jul 13, 2020 6:26 pm What are your thoughts?
My thought is that I'll stick to index funds. The holdings of the Wellesley fund are just too limited to give me confidence. Yes, the fund has a great track record, but we've seen a lot of active funds with great track records drop to market averages or below over the course of time.
Explorer
Posts: 475
Joined: Thu Oct 13, 2016 7:54 pm

Re: All in with Wellesley

Post by Explorer »

UpperNwGuy wrote: Mon Jul 13, 2020 9:49 pm
grobertj wrote: Mon Jul 13, 2020 6:26 pm What are your thoughts?
My thought is that I'll stick to index funds. The holdings of the Wellesley fund are just too limited to give me confidence. Yes, the fund has a great track record, but we've seen a lot of active funds with great track records drop to market averages or below over the course of time.
Nothing wrong with Wellesley as a single holding for the entire portfolio - it beats VTI which has top 5 stocks adding up to 20%
Explorer
Posts: 475
Joined: Thu Oct 13, 2016 7:54 pm

Re: All in with Wellesley

Post by Explorer »

OP - Smart choice with Wellesley, there is no other active fund that mixes the two fabulous ingredients of Wellesley - dividen stocks with highest quality corporate bonds (hand picked by top most group managed Wellington company).
RocketShipTech
Posts: 679
Joined: Sat Jun 13, 2020 10:08 pm

Re: All in with Wellesley

Post by RocketShipTech »

friar1610
Posts: 1805
Joined: Sat Nov 29, 2008 9:52 pm
Location: MA South Shore

Re: All in with Wellesley

Post by friar1610 »

Although I don't own Wellesley, I may soon. I want to increase my stock allocation by about 5% to bring it up to 50%. At the next market dip I plan to move half our IRAs to either Wellesley or TR Income (VTINX) from what is essentially Total Bond. This will accomplish that.

Based on my research I think your plan is sound.
Friar1610
User avatar
whodidntante
Posts: 9112
Joined: Thu Jan 21, 2016 11:11 pm
Location: outside the echo chamber

Re: All in with Wellesley

Post by whodidntante »

I agree that PAS is not worth the fee and their are simpler, cheaper methods available.

The main risks with a conservative, fixed income heavy portfolio are longevity and inflation. I.e., there are risks in too much safety. I've observed that that some people in their 60's assume they'll die soon, but a lot of people make it to their 90's and blow through a lot of money for healthcare and long term care. That said, if you have way more than you could ever spend, no problem.
MathIsMyWayr
Posts: 2256
Joined: Mon Mar 27, 2017 10:47 pm
Location: CA

Re: All in with Wellesley

Post by MathIsMyWayr »

You invested all your IRA in the Wellesley Income Fund Admiral Shares (VWIAX). I am wondering what percentage of your total investable is IRA and how the rest is invested.
iamblessed
Posts: 735
Joined: Sat Jun 09, 2018 11:52 am

Re: All in with Wellesley

Post by iamblessed »

Great fund. I almost bought it in my taxable I liked it so much.
User avatar
Socrates
Posts: 477
Joined: Sun May 13, 2018 10:27 pm
Location: Margaritaville

Re: All in with Wellesley

Post by Socrates »

What are your thoughts?
Outstanding choice. Simple, low cost, well managed fund that has has a nice mix of stocks for future growth and bonds for safety.

Over the last 50 years made over 9.5%. I have most of my IRA in the same fund with the rest in Wellington. People complain that it cant keep that pace, but yet it keeps chugging along. :sharebeer
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.
WhyNotUs
Posts: 1770
Joined: Sun Apr 14, 2013 11:38 am

Re: All in with Wellesley

Post by WhyNotUs »

It is against the spirit and intent of what Bogle set up to charge 30 basis points for an index portfolio. It is annoying that every time I log onto my account or read a VG email they are trying to sell it to me, There may be some people who will experience value from it but the level of effort required would justify 10 basis points at most and that would mostly be for special tax situations or hand-holding rather than asset allocation, IMO.

When I first hit flagship or whatever it is called now we had a very nice free session with a CFP that really help with buy in for my wife but that was before they were pushing intl so hard and there is no way I would pay 30 points for it from an organization that has thrived by pushing down the cost of investing. For me, it is a sign the VG has lost its way and needs to get back on track.
tibbitts wrote: Mon Jul 13, 2020 7:49 pm My only thoughts:

I'd keep a close eye on any active fund - make sure you read reports, stop in at the library to see what Morningstar has to say, etc.

It's kind of outrageous to criticize PAS for "cookie cutter" portfolios. What exactly is unique about your situation that would warrant a unique portfolio? Even before PAS, when a Vanguard rep would exercise any creativity at all in portfolio construction (and even "strayed" into active fund recommendations!), they were widely criticized here for needless complexity, etc. So now we have all the PAS reps frequently on the same page and recommending a fairly simple portfolio of the same index funds, and we criticize them for being cookie cutter. Seriously, they have to be feeling they can't win.
I own the next hot stock- VTSAX
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

WhyNotUs wrote: Mon Jul 13, 2020 10:34 pm It is against the spirit and intent of what Bogle set up to charge 30 basis points for an index portfolio. It is annoying that every time I log onto my account or read a VG email they are trying to sell it to me, There may be some people who will experience value from it but the level of effort required would justify 10 basis points at most and that would mostly be for special tax situations or hand-holding rather than asset allocation, IMO.

When I first hit flagship or whatever it is called now we had a very nice free session with a CFP that really help with buy in for my wife but that was before they were pushing intl so hard and there is no way I would pay 30 points for it from an organization that has thrived by pushing down the cost of investing. For me, it is a sign the VG has lost its way and needs to get back on track.
tibbitts wrote: Mon Jul 13, 2020 7:49 pm My only thoughts:

I'd keep a close eye on any active fund - make sure you read reports, stop in at the library to see what Morningstar has to say, etc.

It's kind of outrageous to criticize PAS for "cookie cutter" portfolios. What exactly is unique about your situation that would warrant a unique portfolio? Even before PAS, when a Vanguard rep would exercise any creativity at all in portfolio construction (and even "strayed" into active fund recommendations!), they were widely criticized here for needless complexity, etc. So now we have all the PAS reps frequently on the same page and recommending a fairly simple portfolio of the same index funds, and we criticize them for being cookie cutter. Seriously, they have to be feeling they can't win.
What I'm saying is that when the CFPs did more than specify a simple index portfolio that you don't seem to feel is worth any expense, people didn't like that either. I don't think I'd feel better, or maybe even as good, about paying .3% to a firm that didn't thrive by pushing down the cost of investing. It sounds like you're criticizing Vanguard for being otherwise well-behaved. Expense ratios for virtually all Vanguard funds are lower now than they were in the Bogle era that you seem to be feeling nostalgic for.
User avatar
KEotSK66
Posts: 364
Joined: Wed Mar 11, 2020 7:03 pm

Re: All in with Wellesley

Post by KEotSK66 »

grobertj wrote: Mon Jul 13, 2020 6:26 pm I'm 66 and retired. Both my wife and I are drawing Social Security. Last month, I paid off my mortgage, so I no longer have any debt. Since mid March, I've struggled to find the right portfolio for me. I explored Vanguard's PAS but I decided it was too cookie cutter and didn't add enough value to warrant a 0.30% fee. After discussions with my Flagship rep, I've decided to invest my total IRA in the Wellesley Income Fund Admiral Shares (VWIAX). I've owned it in the past and was always pleased with the return. While I know that most of you are committed to index funds, I'd prefer to have experts determine the right investments and allocations. Wellesley meets that need. I''ll keep a cash reserve of around 6 months in an Ally Savings Account currently paying 1.0% interest. I''ll withdraw from my IRA to keep the cash reserve whole.

What are your thoughts?
both of my iras are 100% wellesley (vwiax), when i retire i'll roll over my 401k to wellesley too

i prefer active management too, although i'd probably index in my taxable account

good luck
"i just got fluctuated out of $1,500", jerry
UpperNwGuy
Posts: 4106
Joined: Sun Oct 08, 2017 7:16 pm

Re: All in with Wellesley

Post by UpperNwGuy »

Explorer wrote: Mon Jul 13, 2020 9:55 pm
UpperNwGuy wrote: Mon Jul 13, 2020 9:49 pm
grobertj wrote: Mon Jul 13, 2020 6:26 pm What are your thoughts?
My thought is that I'll stick to index funds. The holdings of the Wellesley fund are just too limited to give me confidence. Yes, the fund has a great track record, but we've seen a lot of active funds with great track records drop to market averages or below over the course of time.
Nothing wrong with Wellesley as a single holding for the entire portfolio - it beats VTI which has top 5 stocks adding up to 20%
Just to clarify:
— the top 10 stocks in Wellesley are 31.9% of equity.
— the top 10 stocks in VTI are 22.6% of equity.

Here are the top 10 stocks in Wellesley:
Johnson & Johnson
Cisco Systems Inc.
Pfizer Inc.
Verizon Communications Inc.
Comcast Corp.
Intel Corp.
Bank of America Corp.
JPMorgan Chase & Co.
Crown Castle International Corp.
Lockheed Martin Corp.

Here are the top 10 stocks in VTI:
Microsoft Corp.
Apple Inc.
Amazon.com Inc.
Alphabet Inc.
Facebook Inc.
Johnson & Johnson
Berkshire Hathaway Inc.
Visa Inc.
Procter & Gamble Co.
UnitedHealth Group Inc.

I'll stick with VTI.
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

With all these posts praising Wellesley, some of us are getting nervous and wondering if it's time to jump ship after all these years of owning it. Could we please see some "Thinking of dumping Wellesley!" posts for balance, please?
Nowizard
Posts: 3018
Joined: Tue Oct 23, 2007 5:33 pm

Re: All in with Wellesley

Post by Nowizard »

We believe that funds like Wellesley also offer a diversification factor not typically discussed, that being addition of a low cost, actively managed fund. We use it in addition to index funds. Some even consider Wellesley assets only as part of the bond portion in portfolios, though that is not our choice.
The true key is to evaluate possible choices carefully and then make your move. You do not have to be correct, just able to accept the results of your decision and tune out any other information that does not take into account your circumstances. The one others can never fully appreciate is the psychological factor of pillow comfort as it interacts with perceived need to take risk (Which may differ from the interpretation of your need by others), financial goals, investing horizon and other factors that may exist.

Tim
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: All in with Wellesley

Post by dbr »

tibbitts wrote: Tue Jul 14, 2020 7:54 am With all these posts praising Wellesley, some of us are getting nervous and wondering if it's time to jump ship after all these years of owning it. Could we please see some "Thinking of dumping Wellesley!" posts for balance, please?
Not from me. But if you need to hear something I am totally unimpressed by why someone would think Wellesley is a clearly good idea compared to any of lots of other ways of getting the same place. I would also be unimpressed by someone trying to argue Wellesley is a bad idea.

OK. If you need an argument, the argument is that if a fund benefits from active management it must by definition also have manager risk, and who wants to add an unneeded risk to their portfolio. It has happened in history that Wellesley has gone wrong.

I don't know if you can get any mileage out of arguing that it is a bad idea to hold only 67 stocks or that the bond holding should be more diversified.

Disclaimer: I don't own Wellesley and never imagine I would because I don't need to and I don't want to. That is also the reason I don't tilt to small caps or engage in a variety of other possible machinations in investing.
Last edited by dbr on Tue Jul 14, 2020 8:23 am, edited 1 time in total.
Nowizard
Posts: 3018
Joined: Tue Oct 23, 2007 5:33 pm

Re: All in with Wellesley

Post by Nowizard »

Tibbitts: It would be helpful to mention why you are becoming nervous? I suspect those of us who also have Wellesley would be quite interested. Thanks.

Tim
sixtyforty
Posts: 487
Joined: Tue Nov 25, 2014 12:22 pm
Location: USA

Re: All in with Wellesley

Post by sixtyforty »

tibbitts wrote: Tue Jul 14, 2020 7:54 am With all these posts praising Wellesley, some of us are getting nervous and wondering if it's time to jump ship after all these years of owning it. Could we please see some "Thinking of dumping Wellesley!" posts for balance, please?
It's tracking closely to a 40/60 US index and slightly ahead of the Target Risk VSCGX which is approx 40/60. I don't think there is a reason to be nervous yet. If it starts lagging the 40/60, I might look at switching.

https://www.portfoliovisualizer.com/bac ... ion4_3=100
"Simplicity is the ultimate sophistication" - Leonardo Da Vinci
Dave55
Posts: 793
Joined: Tue Sep 03, 2013 2:51 pm

Re: All in with Wellesley

Post by Dave55 »

Wellesley is an excellent fund.

Dave
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: All in with Wellesley

Post by dbr »

sixtyforty wrote: Tue Jul 14, 2020 8:34 am
tibbitts wrote: Tue Jul 14, 2020 7:54 am With all these posts praising Wellesley, some of us are getting nervous and wondering if it's time to jump ship after all these years of owning it. Could we please see some "Thinking of dumping Wellesley!" posts for balance, please?
It's tracking closely to a 40/60 US index and slightly ahead of the Target Risk VSCGX which is approx 40/60. I don't think there is a reason to be nervous yet. If it starts lagging the 40/60, I might look at switching.

https://www.portfoliovisualizer.com/bac ... ion4_3=100
deleted
Last edited by dbr on Tue Jul 14, 2020 8:58 am, edited 1 time in total.
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

Nowizard wrote: Tue Jul 14, 2020 8:22 am Tibbitts: It would be helpful to mention why you are becoming nervous? I suspect those of us who also have Wellesley would be quite interested. Thanks.

Tim
Only because by the time everybody comes around to agreeing something is a good investment, it usually turns out not to be. Been there, done that (Windsor, U.S. Growth, Magellan, ...)

But no I'm not planning on dumping Wellesley in the immediate future, but I do like to keep tabs on it by at least checking reports, etc. It seems just the name is good enough for people here, and I find that concerning. I don't want to be that Wellington shareholder in the '60s and '70s - I don't have that long for the fund to re-find its way before spending my investment.
Last edited by tibbitts on Tue Jul 14, 2020 8:57 am, edited 2 times in total.
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: All in with Wellesley

Post by dbr »

dbr wrote: Tue Jul 14, 2020 8:41 am
sixtyforty wrote: Tue Jul 14, 2020 8:34 am
tibbitts wrote: Tue Jul 14, 2020 7:54 am With all these posts praising Wellesley, some of us are getting nervous and wondering if it's time to jump ship after all these years of owning it. Could we please see some "Thinking of dumping Wellesley!" posts for balance, please?
It's tracking closely to a 40/60 US index and slightly ahead of the Target Risk VSCGX which is approx 40/60. I don't think there is a reason to be nervous yet. If it starts lagging the 40/60, I might look at switching.

https://www.portfoliovisualizer.com/bac ... ion4_3=100
deleted I didn't mean to post this reply.
User avatar
arcticpineapplecorp.
Posts: 6186
Joined: Tue Mar 06, 2012 9:22 pm

Re: All in with Wellesley

Post by arcticpineapplecorp. »

couple additions:

1. If Vanguard PAS is "only" recommending index funds (I wasn't aware of that), that doesn't make it a bad thing. In fact, it could be argued since they are acting as fiduciaries, then shouldn't they only recommend index funds? I mean, if they recommend active funds and they underperform the index, then it could be argued they didn't act in your best interest. It's not just a suitability standard, it's a fiduciary standard. Active funds may be suitable, but they are not in the best interest of the client, unless you can know for sure ahead of time the active fund will do better than index funds. In the absence of such a guarantee, there's an added risk with active funds, the risk of underperforming the index.

2. UpperNWguy showed you half the story. Not only are the largest held stocks in both funds (Wellesley and VTI) similar, the more important point is Wellesley is far less diversified. Yes, others can pile on and say once you have 30+ stocks you have the same diversification as thousands of stock. That might be true, but if it's not costing you more to own 11,000 companies (actually it costs you LESS), then you have to ask yourself why wouldn't you? Because while Wellesley only costs 0.16%, the target date retirement income only costs 0.12% and yet for lower cost look how much more you get:

Stocks:
Wellesley 67 stocks
Target Date 10,948 stocks

Bonds:
Wellesley 1189 bonds
Target Date 15,801 bonds
Last edited by arcticpineapplecorp. on Tue Jul 14, 2020 9:29 am, edited 1 time in total.
It's "Stay" the course, not Stray the Course. Buy and Hold works. You should really try it sometime. Get a plan: www.bogleheads.org/wiki/Investment_policy_statement
dbr
Posts: 33842
Joined: Sun Mar 04, 2007 9:50 am

Re: All in with Wellesley

Post by dbr »

arcticpineapplecorp. wrote: Tue Jul 14, 2020 8:55 am couple additions:



Stocks:
Wellesley 67 stocks
Target Date 10,948

Bonds:
Wellesley 1189
Target Date 15,801
So you are getting some mileage out of the lack of diversification.

I wouldn't argue with you.
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

arcticpineapplecorp. wrote: Tue Jul 14, 2020 8:55 am couple additions:

1. If Vanguard PAS is "only" recommending index funds (I wasn't aware of that), that doesn't make it a bad thing. In fact, it could be argued since they are acting as fiduciaries, then shouldn't they only recommend index funds? I mean, if they recommend active funds and they underperform the index, then it could be argued they didn't act in your best interest. It's not just a suitability standard, it's a fiduciary standard. Active funds may be suitable, but they are not in the best interest of the client, unless you can know for sure ahead of time the active fund will do better than index funds. In the absence of such a guarantee, there's an added risk with active funds, the risk of underperforming the index.

2. UpperNWguy showed you half the story. Not only are the largest held stocks in both funds (Wellesley and VTI) similar, the more important point is Wellesley is far less diversified. Yes, others can pile on and say once you have 30+ stocks you have the same diversification as thousands of stock. That might be true, but if it's not costing you more to own 11,000 companies (actually it costs you LESS), then you have to ask yourself why wouldn't you? Because while Wellesley only costs 0.16%, the target date retirement income only costs 0.12% and yet for lower cost look how much more you get:

Stocks:
Wellesley 67 stocks
Target Date 10,948

Bonds:
Wellesley 1189
Target Date 15,801
There has been litigation for many years now in the case of employer plans providing active options, although I haven't followed the litigation and don't know if there's been any conclusive results. I don't know if that has influenced Vanguard's shift from active to index.

But it would be interesting if so many Bogleheads were endorsing an active product that a fiduciary couldn't.
bloom2708
Posts: 8171
Joined: Wed Apr 02, 2014 2:08 pm
Location: Fargo, ND

Re: All in with Wellesley

Post by bloom2708 »

I don't think Wellington/Wellesley by themselves is a great strategy.

As a compliment to the Total US (and maybe Total International) funds, they would add that "value tilt" that is so often marketed here.

If value/a bit longer duration corporate bonds return to favor. I'm sure they will at varying points.

I think the funds are too narrow as stand alone funds. But that is just one opinion to be taken with a grain of very fine salt. :(

Balanced Index fund seems more balanced if someone is trying to avoid international and have an "all in one fund". LifeStrategy funds add international components for stocks/bonds.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
User avatar
Topic Author
grobertj
Posts: 88
Joined: Fri May 15, 2020 1:02 pm
Location: Greensboro, NC

Re: All in with Wellesley

Post by grobertj »

bloom2708 wrote: Tue Jul 14, 2020 9:18 am I don't think Wellington/Wellesley by themselves is a great strategy.

As a compliment to the Total US (and maybe Total International) funds, they would add that "value tilt" that is so often marketed here.

If value/a bit longer duration corporate bonds return to favor. I'm sure they will at varying points.

I think the funds are too narrow as stand alone funds. But that is just one opinion to be taken with a grain of very fine salt. :(

Balanced Index fund seems more balanced if someone is trying to avoid international and have an "all in one fund". LifeStrategy funds add international components for stocks/bonds.
I'm not trying to avoid international funds. I just believe you get international exposure when the fund contains international companies. I worked for my whole career for P&G, and half their sales were overseas...most of which were produced outside the US.
The only constant is CHANGE!!
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

grobertj wrote: Tue Jul 14, 2020 11:19 am
bloom2708 wrote: Tue Jul 14, 2020 9:18 am I don't think Wellington/Wellesley by themselves is a great strategy.

As a compliment to the Total US (and maybe Total International) funds, they would add that "value tilt" that is so often marketed here.

If value/a bit longer duration corporate bonds return to favor. I'm sure they will at varying points.

I think the funds are too narrow as stand alone funds. But that is just one opinion to be taken with a grain of very fine salt. :(

Balanced Index fund seems more balanced if someone is trying to avoid international and have an "all in one fund". LifeStrategy funds add international components for stocks/bonds.
I'm not trying to avoid international funds. I just believe you get international exposure when the fund contains international companies. I worked for my whole career for P&G, and half their sales were overseas...most of which were produced outside the US.
Although intuitively that seems to make sense, some of us have difficult reconciling it with the discrepancies in U.S. and ex-U.S. equity performance. It does seem like a U.S.-domiciled international business should be able to have its cake and eat it too, which is basically what the "international exposure" theory seems to say.
User avatar
Topic Author
grobertj
Posts: 88
Joined: Fri May 15, 2020 1:02 pm
Location: Greensboro, NC

Re: All in with Wellesley

Post by grobertj »

tibbitts wrote: Tue Jul 14, 2020 11:29 am
grobertj wrote: Tue Jul 14, 2020 11:19 am
bloom2708 wrote: Tue Jul 14, 2020 9:18 am I don't think Wellington/Wellesley by themselves is a great strategy.

As a compliment to the Total US (and maybe Total International) funds, they would add that "value tilt" that is so often marketed here.

If value/a bit longer duration corporate bonds return to favor. I'm sure they will at varying points.

I think the funds are too narrow as stand alone funds. But that is just one opinion to be taken with a grain of very fine salt. :(

Balanced Index fund seems more balanced if someone is trying to avoid international and have an "all in one fund". LifeStrategy funds add international components for stocks/bonds.
I'm not trying to avoid international funds. I just believe you get international exposure when the fund contains international companies. I worked for my whole career for P&G, and half their sales were overseas...most of which were produced outside the US.
Although intuitively that seems to make sense, some of us have difficult reconciling it with the discrepancies in U.S. and ex-U.S. equity performance. It does seem like a U.S.-domiciled international business should be able to have its cake and eat it too, which is basically what the "international exposure" theory seems to say.
I completely agree that you can get sufficient international exposure with a mix of large companies. Most large companies have a great deal of international business. And remember, Jack Bogle agreed.
The only constant is CHANGE!!
DanFrancis
Posts: 61
Joined: Wed Jun 21, 2017 12:38 am

Re: All in with Wellesley

Post by DanFrancis »

I put most of my parent's investments in Wellesley 30 years ago and it worked out well. Of course, that was a period where interest rates were dropping and therefore the large bond percentage paid off. While I still think Wellesley is fine--
for myself, I have opted to put most of my retirement in Target Funds. But my guess is that they will probably both fare in the same ballpark.
tibbitts
Posts: 11891
Joined: Tue Feb 27, 2007 6:50 pm

Re: All in with Wellesley

Post by tibbitts »

grobertj wrote: Tue Jul 14, 2020 6:27 pm
tibbitts wrote: Tue Jul 14, 2020 11:29 am
grobertj wrote: Tue Jul 14, 2020 11:19 am
bloom2708 wrote: Tue Jul 14, 2020 9:18 am I don't think Wellington/Wellesley by themselves is a great strategy.

As a compliment to the Total US (and maybe Total International) funds, they would add that "value tilt" that is so often marketed here.

If value/a bit longer duration corporate bonds return to favor. I'm sure they will at varying points.

I think the funds are too narrow as stand alone funds. But that is just one opinion to be taken with a grain of very fine salt. :(

Balanced Index fund seems more balanced if someone is trying to avoid international and have an "all in one fund". LifeStrategy funds add international components for stocks/bonds.
I'm not trying to avoid international funds. I just believe you get international exposure when the fund contains international companies. I worked for my whole career for P&G, and half their sales were overseas...most of which were produced outside the US.
Although intuitively that seems to make sense, some of us have difficult reconciling it with the discrepancies in U.S. and ex-U.S. equity performance. It does seem like a U.S.-domiciled international business should be able to have its cake and eat it too, which is basically what the "international exposure" theory seems to say.
I completely agree that you can get sufficient international exposure with a mix of large companies. Most large companies have a great deal of international business. And remember, Jack Bogle agreed.
Most large companies domiciled outside the U.S. also do business in the U.S. So again, if the international exposure provided by doing business outside your domicile is sufficient, then ex-U.S. businesses doing business here should benefit to a similar extent as U.S. businesses doing business internationally. If that's the theory, then why not invest in both U.S. and ex-U.S.-domiciled companies?
GaryA505
Posts: 678
Joined: Wed Feb 08, 2017 2:59 pm
Location: New Mexico

Re: All in with Wellesley

Post by GaryA505 »

I don't recall who said this about investing, but I think the saying, "get most of it right and don't do anything stupid" applies here.

Although I don't own it, I think Wellesley is a fine fund and would help people do that.
User avatar
Toons
Posts: 13793
Joined: Fri Nov 21, 2008 10:20 am
Location: Hills of Tennessee

Re: All in with Wellesley

Post by Toons »

grobertj wrote: Mon Jul 13, 2020 6:26 pm I'm 66 and retired. Both my wife and I are drawing Social Security. Last month, I paid off my mortgage, so I no longer have any debt. Since mid March, I've struggled to find the right portfolio for me. I explored Vanguard's PAS but I decided it was too cookie cutter and didn't add enough value to warrant a 0.30% fee. After discussions with my Flagship rep, I've decided to invest my total IRA in the Wellesley Income Fund Admiral Shares (VWIAX). I've owned it in the past and was always pleased with the return. While I know that most of you are committed to index funds, I'd prefer to have experts determine the right investments and allocations. Wellesley meets that need. I''ll keep a cash reserve of around 6 months in an Ally Savings Account currently paying 1.0% interest. I''ll withdraw from my IRA to keep the cash reserve whole.

What are your thoughts?
My Thought(s)
Nice Move.
I am comfortable having re allocated our Roth Ira assets to
Wellesley Admiral via exchange from
Lifestrategy Growth(owned and purchased since 1998)
Will eventually take the dividends in cash ,as of now
reinvesting
We are retired.(69-65)
Sleep Well
:mrgreen:
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee
fsrph
Posts: 1192
Joined: Sun Jul 26, 2009 7:54 pm
Location: Pa.

Re: All in with Wellesley

Post by fsrph »

I use Wellesley extensively in my tax deferred retirement accounts. No complaints.

Francis
"Success is getting what you want. Happiness is wanting what you get." | Dale Carnegie
leibo
Posts: 8
Joined: Wed Jul 20, 2016 4:40 pm

Re: All in with Wellesley

Post by leibo »

I own Wellesley as well as VTSAX and VBTLX in my retirement account. I have been pleased with the performance of Wellesley and feel that it offers some diversification in my portfolio. In my opinion I don't think that there is anything wrong with owning a managed fund along with index funds especially if it is Wellesley.
mtmingus
Posts: 440
Joined: Sun Jan 07, 2018 4:15 pm

Re: All in with Wellesley

Post by mtmingus »

Another Wellesley Income long term holder here. But if we trust portfoliovisualizer, we could do as well with a 2-index fund portfolio at Fidelity and Vanguard: 35 stocks + 65 bond (or 40:60):

https://www.portfoliovisualizer.com/bac ... tion5_3=65
User avatar
tvubpwcisla
Posts: 524
Joined: Sat Nov 09, 2019 10:09 am

Re: All in with Wellesley

Post by tvubpwcisla »

Congrats, I think you made a great choice and will sleep well at night.
Stay invested my friends.
Rudedog
Posts: 265
Joined: Wed Aug 01, 2018 3:15 pm

Re: All in with Wellesley

Post by Rudedog »

VWIAX is almost 14% of my portfolio, very satisfied with it.
User avatar
KEotSK66
Posts: 364
Joined: Wed Mar 11, 2020 7:03 pm

Re: All in with Wellesley

Post by KEotSK66 »

arcticpineapplecorp. wrote: Tue Jul 14, 2020 8:55 am couple additions:

1. If Vanguard PAS is "only" recommending index funds (I wasn't aware of that), that doesn't make it a bad thing. In fact, it could be argued since they are acting as fiduciaries, then shouldn't they only recommend index funds? I mean, if they recommend active funds and they underperform the index, then it could be argued they didn't act in your best interest. It's not just a suitability standard, it's a fiduciary standard. Active funds may be suitable, but they are not in the best interest of the client, unless you can know for sure ahead of time the active fund will do better than index funds. In the absence of such a guarantee, there's an added risk with active funds, the risk of underperforming the index.

by that standard then everyone should be invested in pimix or prcwx

2. UpperNWguy showed you half the story. Not only are the largest held stocks in both funds (Wellesley and VTI) similar, the more important point is Wellesley is far less diversified. Yes, others can pile on and say once you have 30+ stocks you have the same diversification as thousands of stock. That might be true, but if it's not costing you more to own 11,000 companies (actually it costs you LESS), then you have to ask yourself why wouldn't you? Because while Wellesley only costs 0.16%, the target date retirement income only costs 0.12% and yet for lower cost look how much more you get:

Stocks:
Wellesley 67 stocks
Target Date 10,948 stocks

Bonds:
Wellesley 1189 bonds
Target Date 15,801 bonds

all you have to do is compare the s&p and the tsm to see the thousands of additional stocks don't do anything for tsm, he who defends everything defends nothing
"i just got fluctuated out of $1,500", jerry
Post Reply