Why not Puritan or Wellington?

[Badgered]

Q:
I know these are not index funds ... but what is wrong with holding FPURX (Fidelity Puritan) or VWELX (Vanguard Wellington) as long as they fit my asset allocation profile?

Background:
My spouse is already retired and I am getting close. I am trying to make our portfolio as simple as possible for our future needs. My spouse is not interested at all in the market so I've been researching one fund portfolios which fit our desired asset allocation. I know that my spouse will not rebalance a portfolio ever, nor will she log in and analyze which holding to draw from each month. She is 100% set it and forget it.

It appears that Puritan, Wellington, and perhaps the balanced index funds (VBIAX and FBALX) would fit the majority of our needs. We would hold (one of) these funds in our tax advantage accounts. Taxable brokerage would continue to be a three fund type mix (VTI, VXUS, and Treasuries, MM, SGOV).

In researching these one-fund solutions the history of returns and volatility look acceptable and on par with the three fund portfolio of similar asset allocation. Most of them are a little light on international equity, which could be boosted with some VXUS in taxable if desired.

We are also in a lower tax bracket currently (12%) if that makes any difference.

What would be the disadvantages of moving our portfolio into Puritan or Wellington (or VBIAX/FBALX)?

[Grt2bOutdoors]

Nothing wrong with it if it meets your risk tolerance and needs. The only possible issue is maintaining asset allocation as Wellington is 65% value/35% intermediate corporates. Holding in a tax deferred vehicle such as IRA is preferred due to large distributions from the fund.

[retired@50]

Q:
I know these are not index funds ... but what is wrong with holding FPURX (Fidelity Puritan) or VWELX (Vanguard Wellington) as long as they fit my asset allocation profile?

Background:
My spouse is already retired and I am getting close. I am trying to make our portfolio as simple as possible for our future needs. My spouse is not interested at all in the market so I've been researching one fund portfolios which fit our desired asset allocation. I know that my spouse will not rebalance a portfolio ever, nor will she log in and analyze which holding to draw from each month. She is 100% set it and forget it.

It appears that Puritan, Wellington, and perhaps the balanced index funds (VBIAX and FBALX) would fit the majority of our needs. We would hold (one of) these funds in our tax advantage accounts. Taxable brokerage would continue to be a three fund type mix (VTI, VXUS, and Treasuries, MM, SGOV).

In researching these one-fund solutions the history of returns and volatility look acceptable and on par with the three fund portfolio of similar asset allocation. Most of them are a little light on international equity, which could be boosted with some VXUS in taxable if desired.

We are also in a lower tax bracket currently (12%) if that makes any difference.

What would be the disadvantages of moving our portfolio into Puritan or Wellington (or VBIAX/FBALX)?

Nothing wrong with a "one-fund" solution. In fact, some think it's elegant. The utmost in simplicity.

In the 12% bracket, there isn't much in the way of downside either. If you're suffering any negative tax consequences in your holdings, it's most likely coming from "Treasuries, MM, SGOV" but I would suspect these aren't an issue in the 12% bracket.

Regards,

[KlangFool]

OP,

1) 30% of my portfolio is in the Wellington Fund.

https://finance.yahoo.com/quote/FPURX/? ... hSgtEGXgHa

2) The problem with the Puritan fund is that the expense ratio is 0.47%. It is much higher than the Wellington Fund (0.17%). And, I do not trust/know the Puritan fund.

KlangFool

[AlwaysLearningMore]

Here are the responses you're going to receive:
Manager risk
Tax efficiency if not in tax-deferred accts
Why not Target date fund or Life Strategy fund?
"Not enough intl in Wellington"
"Low cost actively managed funds are kinda ok if they meet your asset allocation"

[tibbitts]

Q:
I know these are not index funds ... but what is wrong with holding FPURX (Fidelity Puritan) or VWELX (Vanguard Wellington) as long as they fit my asset allocation profile?

Background:
My spouse is already retired and I am getting close. I am trying to make our portfolio as simple as possible for our future needs. My spouse is not interested at all in the market so I've been researching one fund portfolios which fit our desired asset allocation. I know that my spouse will not rebalance a portfolio ever, nor will she log in and analyze which holding to draw from each month. She is 100% set it and forget it.

It appears that Puritan, Wellington, and perhaps the balanced index funds (VBIAX and FBALX) would fit the majority of our needs. We would hold (one of) these funds in our tax advantage accounts. Taxable brokerage would continue to be a three fund type mix (VTI, VXUS, and Treasuries, MM, SGOV).

In researching these one-fund solutions the history of returns and volatility look acceptable and on par with the three fund portfolio of similar asset allocation. Most of them are a little light on international equity, which could be boosted with some VXUS in taxable if desired.

We are also in a lower tax bracket currently (12%) if that makes any difference.

What would be the disadvantages of moving our portfolio into Puritan or Wellington (or VBIAX/FBALX)?

You should really clarify if you're asking about balanced funds in general (which I think you are) vs. separate equity/fixed-income funds, or whether you're intentionally throwing active vs. index in the mix (which is a completely separate question.) You'll get much more targeted responses if you settle on one question or the other.

[Badgered]

Nothing wrong with a "one-fund" solution. In fact, some think it's elegant. The utmost in simplicity.

In the 12% bracket, there isn't much in the way of downside either. If you're suffering any negative tax consequences in your holdings, it's most likely coming from "Treasuries, MM, SGOV" but I would suspect these aren't an issue in the 12% bracket.

Regards,

Yes, I do pay taxes on my bond/cash holdings in taxable, though not enough to bump us up to a higher bracket. I don't mind much though, as I do want to have stable cash accessible as needed. I'm not 59.5 yet, so would not want to have to dip into retirement accounts just yet.

[Badgered]

Nothing wrong with it if it meets your risk tolerance and needs. The only possible issue is maintaining asset allocation as Wellington is 65% value/35% intermediate corporates. Holding in a tax deferred vehicle such as IRA is preferred due to large distributions from the fund.

Do you mean asset allocation as in a changing equity/bond ratio as we age? I can see the problem here if we want to adjust bond allocation in the future. In that case I guess the only one-fund solution would be a TDF correct?

[rkhusky]

I wouldn’t hold Puritan at Vanguard or Wellington at Fidelity. One could also ask, why not Vanguard LifeStrategy Moderate Growth?

[AlohaBill]

Why not, indeed. Go for it. Don’t worry; be happy.

[Badgered]

OP,

1) 30% of my portfolio is in the Wellington Fund.

https://finance.yahoo.com/quote/FPURX/? ... hSgtEGXgHa

2) The problem with the Puritan fund is that the expense ratio is 0.47%. It is much higher than the Wellington Fund (0.17%). And, I do not trust/know the Puritan fund.

KlangFool

Wellington is also a contender.
However I am at ETrade and Fidelity, so I would be looking at Wellington Investor shares (VWELX) which has an expense ratio of 0.26 and also a transaction fee for new purchases (at Fidelity). Looking at the two funds (Puritan and Wellington) they have long history of similar returns and risk. I could hold wellington at ETrade and Puritan at Fidelity but I'm not sure it would be worth doing so?

[rich126]

I like Puritan and in my Fidelity brokerage (kind of a mess of my accounts, HSA and inherited accounts) I use it. Its one of the things I miss at Schwab.
I don't have anything with Vanguard.

[KlangFool]

OP,

1) 30% of my portfolio is in the Wellington Fund.

https://finance.yahoo.com/quote/FPURX/? ... hSgtEGXgHa

2) The problem with the Puritan fund is that the expense ratio is 0.47%. It is much higher than the Wellington Fund (0.17%). And, I do not trust/know the Puritan fund.

KlangFool

Wellington is also a contender.
However I am at ETrade and Fidelity, so I would be looking at Wellington Investor shares (VWELX) which has an expense ratio of 0.26 and also a transaction fee for new purchases (at Fidelity). Looking at the two funds (Puritan and Wellington) they have long history of similar returns and risk. I could hold wellington at ETrade and Puritan at Fidelity but I'm not sure it would be worth doing so?

Badgered,

I would not buy Puritan fund under any condition. I do not know enough to invest in this fund.

KlangFool

[Badgered]

Here are the responses you're going to receive:
Manager risk
Tax efficiency if not in tax-deferred accts
Why not Target date fund or Life Strategy fund?
"Not enough intl in Wellington"
"Low cost actively managed funds are kinda ok if they meet your asset allocation"

Yes, good points for consideration.
I did look at target date funds, but it seems difficult to know what kind of returns to expect when the allocation changes ... especially as I near retirement. Thinking we might be more comfortable with a fixed allocation. Also I found it difficult to compare the TDF fund returns and risk between the different fund offerings (because it all depends on the glide path of fund right?).

I also considered Life Strategy / AOA / AOR. They seem like what I would want, but the performance seems lacking compared to Wellington/Puritan for similar risk.

I think 'kinda ok' would be acceptable for our situation

[retired@50]

I also considered Life Strategy / AOA / AOR. They seem like what I would want, but the performance seems lacking compared to Wellington/Puritan for similar risk.

The performance differences may have to do with LifeStrategy / AOA / AOR holding international stocks. These have most likely dragged down the performance relative to other "US Only" funds.

Regards,

[rkhusky]

Instead of looking at past performance, you should look at holdings and whether they fit into your plan. For example, international hasn’t done as well as US recently. Does that mean you should be US-only? There is a difference between outcome and strategy.

[Badgered]

You should really clarify if you're asking about balanced funds in general (which I think you are) vs. separate equity/fixed-income funds, or whether you're intentionally throwing active vs. index in the mix (which is a completely separate question.) You'll get much more targeted responses if you settle on one question or the other.

I realize my question is over broad to promote good discussion. Sorry about that, my mind is a scatter lately :/

[Badgered]

I wouldn’t hold Puritan at Vanguard or Wellington at Fidelity. One could also ask, why not Vanguard LifeStrategy Moderate Growth?

VSMGX was also in my comparisons, although new purchase fees apply at Fidelity.

[GaryA505]

I wouldn’t hold Puritan at Vanguard or Wellington at Fidelity. One could also ask, why not Vanguard LifeStrategy Moderate Growth?

You are correct that holding Puritan at Vanguard is a bad idea, due to transaction fees.

However, holding Wellington at Fidelity is fine if you are in retirement and not buying. There is no fee to sell Vanguard funds at Fidelity. Even pre-retirement, you can buy most (or all) Admiral class Vanguard funds at Vanguard and transfer in-kind to Fidelity. That's what I have done.

[Badgered]

I like Puritan and in my Fidelity brokerage (kind of a mess of my accounts, HSA and inherited accounts) I use it. Its one of the things I miss at Schwab.
I don't have anything with Vanguard.

It seems like a decent fund with a long history. I would have thought there would be more discussion of it in the forums here or elsewhere online.
Made me worry that there was something troubling about it that I wasn't seeing.

[Badgered]

Don’t worry; be happy.

I'm trying!! lol

[Badgered]

Instead of looking at past performance, you should look at holdings and whether they fit into your plan. For example, international hasn’t done as well as US recently. Does that mean you should be US-only? There is a difference between outcome and strategy.

I was looking at asset mix as well. 65/35 to 60/40 equity/bond is acceptable to me. I would prefer something closer to 80/20 domestic/international equity but haven't found that fund yet.

[Badgered]

The performance differences may have to do with LifeStrategy / AOA / AOR holding international stocks. These have most likely dragged down the performance relative to other "US Only" funds.

Regards,

Yeah, I suspected that was the performance drag on recent results. I have no idea what's going to happen with international in the future, but I would prefer to find something with equity allocation closer to 80/20.

[rkhusky]

Instead of looking at past performance, you should look at holdings and whether they fit into your plan. For example, international hasn’t done as well as US recently. Does that mean you should be US-only? There is a difference between outcome and strategy.

I was looking at asset mix as well. 65/35 to 60/40 equity/bond is acceptable to me. I would prefer something closer to 80/20 domestic/international equity but haven't found that fund yet.

Wellington has some international, 10-20%.

Puritan has too high of ER for most Bogleheads. Admiral Wellington (VWENX) ER is marginally acceptable.

[cjcerny]

I would do Wellington. I would not do Puritan--too expensive. The performance of either is still pretty darn close to the performance of 2/3 VTI and 1/3 BND, so I don't think there is a compelling reason for choosing them, though, especially when you keep in mind that there is always turnover in the management teams--who knows if the new folks coming in will be able to maintain the track record.

[CWhea1775]

To me the only thing "wrong" with your choosing Wellington would be if you got better performance at a lower expense ratio from another alternative. Last I looked (which was before the bond meltdown of the last year or so), Vanguard's Balanced fund was out-performing Wellington. If that is still true it could be a better one fund solution.

[RunMarkRun]

Here's a thread from last week (re: Wellington etc) that you might find useful:
viewtopic.php?t=438026

[GaryA505]

To me the only thing "wrong" with your choosing Wellington would be if you got better performance at a lower expense ratio from another alternative. Last I looked (which was before the bond meltdown of the last year or so), Vanguard's Balanced fund was out-performing Wellington. If that is still true it could be a better one fund solution.

This only goes back 10 years, but Vanguard Balanced does not seem to be outperforming Wellington Fund. On the contrary, Wellington seems to have done slightly better over 1, 3, 5, and 10 years. However, as always, Wellington has some manager risk.
https://www.portfoliovisualizer.com/bac ... c1TjlGxX8A

[soretired]

To me the only thing "wrong" with your choosing Wellington would be if you got better performance at a lower expense ratio from another alternative. Last I looked (which was before the bond meltdown of the last year or so), Vanguard's Balanced fund was out-performing Wellington. If that is still true it could be a better one fund solution.

Over the last 5 yrs Wellington (VWENX) has out-gained VSMGX by ~13%, 53 to 40. Unless you're referring to a different Vanguard Balanced fund.

[JakeyLee]

Here are the responses you're going to receive:
Manager risk
Tax efficiency if not in tax-deferred accts
Why not Target date fund or Life Strategy fund?
"Not enough intl in Wellington"
"Low cost actively managed funds are kinda ok if they meet your asset allocation"

I think you covered most responses. I will only add: if I wanted a single fund with a similar asset allocation to Wellington, I’d just buy Vanguard Balances Index Fund (VBIAX) with cheaper fees. I’m actually a Wellington fan. But I don’t want any ex-U.S. stock exposure.

[Badgered]

Here's a thread from last week (re: Wellington etc) that you might find useful:
viewtopic.php?t=438026

Thanks, I somehow missed that thread :/

[Lawrence of Suburbia]

Big Wellington Management fan, myself.

The nation's oldest balanced fund, VWELX has been through the storms and the good times, and performed magnificently. It has rewarded its long-term holders richly, returns are competitive with index-based funds like Vanguard Balanced.

I read an article somewhere about the corporate culture there, they hold those lessons learned from a century of experience very close. Hey, Jack Bogle worked there!

[wwhan]

Wellington is a solid balanced fund for a tax deferred account. I would not touch Puritan.

If you do want International exposure there is VGWAX Vanguard Global Wellington Fund Admiral Shares: https://investor.vanguard.com/investmen ... file/vgwax

The Global Wellington Fund does NOT show the same performance of the US Wellington Fund, due to the historical international performance drag.

"Founded in 1928, Wellington Management Company LLP, Boston, Massachusetts, is among the nation’s oldest and most respected institutional investment managers. The firm has advised Vanguard Global Wellington Fund since 2017."

[rkhusky]

To me the only thing "wrong" with your choosing Wellington would be if you got better performance at a lower expense ratio from another alternative. Last I looked (which was before the bond meltdown of the last year or so), Vanguard's Balanced fund was out-performing Wellington. If that is still true it could be a better one fund solution.

Over the last 5 yrs Wellington (VWENX) has out-gained VSMGX by ~13%, 53 to 40. Unless you're referring to a different Vanguard Balanced fund.

VSMGX is LS Moderate Growth. Balanced Fund is VBIAX.

[CWhea1775]

Vanguard website today reports Wellington (VWELX) shares up 9.13% annually over the last five years and 8.31% over 10.

Balanced Index Fund shares (VBAIX) up 9.12% over the last five years and 8.18% over 10.

Both Investor class shares

The Wellington Benchmark is -
65% S&P 500 Index and 35% Lehman U.S. Long Credit AA or Better Bond Index through February 29, 2000; 65% S&P 500 Index and 35% Bloomberg U.S. Credit A or Better Bond Index thereafter.

The fund's benchmark has outperformed Wellington (10.43% over 5 and 9.29% over 10 years)

I owned Wellington for years but decided that it was an emotional attachment and not performance based, as shown vs. the fund's own benchmark. That said there are a myriad of far worse choices to make than Wellington.

[GaryA505]

Vanguard website today reports Wellington (VWELX) shares up 9.13% annually over the last five years and 8.31% over 10.

Balanced Index Fund shares (VBAIX) up 9.12% over the last five years and 8.18% over 10.

Both Investor class shares

The Wellington Benchmark is -
65% S&P 500 Index and 35% Lehman U.S. Long Credit AA or Better Bond Index through February 29, 2000; 65% S&P 500 Index and 35% Bloomberg U.S. Credit A or Better Bond Index thereafter.

The fund's benchmark has outperformed Wellington (10.43% over 5 and 9.29% over 10 years)

I owned Wellington for years but decided that it was an emotional attachment and not performance based, as shown vs. the fund's own benchmark. That said there are a myriad of far worse choices to make than Wellington.

Let's not ignore the fact that the Wellington Benchmark 65/35 also had higher volatility and larger drawdowns over the last 10 years. On a risk-adjusted basis, it's a wash.

[cegibbs]

Look at VIG. Less risk than the overall market, but all equities.

[Grt2bOutdoors]

Nothing wrong with it if it meets your risk tolerance and needs. The only possible issue is maintaining asset allocation as Wellington is 65% value/35% intermediate corporates. Holding in a tax deferred vehicle such as IRA is preferred due to large distributions from the fund.

Do you mean asset allocation as in a changing equity/bond ratio as we age? I can see the problem here if we want to adjust bond allocation in the future. In that case I guess the only one-fund solution would be a TDF correct?

Let me clarify - if you held other funds in another vehicle besides Puritan or Wellington, you prefer to hold an asset allocation of x% equity and y% fixed income, adding either of these funds may alter the overall asset allocation you are attempting to achieve. Other than that, there is nothing wrong with owning either of these two funds. I actually own Wellington in a tax deferred account, but I also hold other funds in varying percentages to ensure my overall asset allocation remains higher in equities asset class.

[bendix]

...

I have Wellington in my 529 and it´s doing okay. Nothing wrong with it.

[Lawrence of Suburbia]

Not to complicate matters but, there's also DODBX (Dodge & Cox Balanced Fund) that's rather like Wellington, in fact has been very competitive with VWELX.

[ruralavalon]

Q:
I know these are not index funds ... but what is wrong with holding FPURX (Fidelity Puritan) or VWELX (Vanguard Wellington) as long as they fit my asset allocation profile?

Background:
My spouse is already retired and I am getting close. I am trying to make our portfolio as simple as possible for our future needs. My spouse is not interested at all in the market so I've been researching one fund portfolios which fit our desired asset allocation. I know that my spouse will not rebalance a portfolio ever, nor will she log in and analyze which holding to draw from each month. She is 100% set it and forget it.

It appears that Puritan, Wellington, and perhaps the balanced index funds (VBIAX and FBALX) would fit the majority of our needs. We would hold (one of) these funds in our tax advantage accounts. Taxable brokerage would continue to be a three fund type mix (VTI, VXUS, and Treasuries, MM, SGOV).

In researching these one-fund solutions the history of returns and volatility look acceptable and on par with the three fund portfolio of similar asset allocation. Most of them are a little light on international equity, which could be boosted with some VXUS in taxable if desired.

We are also in a lower tax bracket currently (12%) if that makes any difference.

What would be the disadvantages of moving our portfolio into Puritan or Wellington (or VBIAX/FBALX)?

My wife also had no desire to learn about investing. My choice for a one-fund portfolio she would not have to manage at all was Vanguard Balanced Index Fund (VBIAX) ER 0.07%.

Our taxable bracket was modest and our taxable account was less than 2% of portfolio, so the tax cost of holding this in the taxable account is trivial.

[nanosour]

I'm in the same boat with respect to my wife. We are both retired in and I faced the same dilemma. I settled on the one fund, set it and forget and believe it's an elegant and efficient means to a less stressful retirement. I've chosen to put it all in FBALX based on their long history and excellent results. I don't know the future, but I know I'm not trying to squeeze every dime out of my investment strategy so FBALX fit the bill for me. Simplicity is what I'm after and so I've set up an automatic monthly sell and transfer to our joint checking account. In the unfortunate event something happens to me, wife doesn't have to worry about income flow as the transfers will just keep flowing month after month.

[GaryA505]

I'm in the same boat with respect to my wife. We are both retired in and I faced the same dilemma. I settled on the one fund, set it and forget and believe it's an elegant and efficient means to a less stressful retirement. I've chosen to put it all in FBALX based on their long history and excellent results. I don't know the future, but I know I'm not trying to squeeze every dime out of my investment strategy so FBALX fit the bill for me. Simplicity is what I'm after and so I've set up an automatic monthly sell and transfer to our joint checking account. In the unfortunate event something happens to me, wife doesn't have to worry about income flow as the transfers will just keep flowing month after month.

I think you are a wise man. An all-in-one fund is a good choice in this situation, and nobody knows which one is best. I think FBLAX, while not an index fund, is a good choice. With $48B in assets it's going to perform pretty-much like an index fund anyway, and I believe having 12 managers somewhat mitigates manager risk.

[Chv396]

My elderly mother (now retired for 20 years) had held FPURX in her Roth for greater than 20 years now. Still holding and reaping the benefits. Solid fund.

[BGeste]

Wellington has adopted very strong ESG and other non financial criteria for investment selection and fund management that could negatively impact returns over time.

Better to go with a pure index approach like Vanguard Life Strategy Moderate Growth Fund, which provides similar asset allocation.

Puritan is too expensive.