Page 1 of 1

Wellesley Income Fund

Posted: Wed Jun 27, 2012 11:12 am
by Erwin
The more I look at Wellesley Income Fund, the more I like it as my only retirement fund (I have been retired for 8 years). Putting the issue of diversification aside, which I understand some may considered too limited, would you/does anyone place most/all of the retirement money in just this one fund? Today I have the money split equally in two funds, the Wellesley and the Vanguard Retirement Income, but I like much better Wellesley's strategy of investing in large value caps, high dividend stocks and the rest in corporate bonds. Also the 35% stock allocation matches my risk requirements.
My thought for just going with Wellesley is that if mutual funds did not exist and I was forced to build a portfolio of individual stocks and bonds, I would most likely try to be not far from the Wellesley's portfolio. Comments please?

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 11:35 am
by Default User BR
I do not use actively-managed funds at all.


Brian

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 11:39 am
by SurfCityBill
Wellesley is a bond heavy balanced fund roughly 40/60 stk/bnd. I think it has a place in a moderate to conservative porfolio. Not sure I'd put everything in it but you can't argue with it's track record. (Past returns are no indication of future returns). You may want to consider splitting between Wellesley and Vanguard Life Strategy Conservative Growth Fund (VSCGX) 40/60 stk/bnd (12% in intl.) Look at a comparative chart and you'll see the two tracked very closely during the last 10 years except during the last three when Wellesley outperformed. Cost for Wellesley is slightly higher .25 vs .15 (non Admiral shares).

-B

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 11:53 am
by YDNAL
mpt follower wrote:The more I look at Wellesley Income Fund, the more I like it as my only retirement fund (I have been retired for 8 years). Putting the issue of diversification aside, which I understand some may considered too limited, would you/does anyone place most/all of the retirement money in just this one fund?
MPT,

Regardless of what anyone else does, you answered your own question. If you don't mind all your eggs in a 60-Stock basket with Corporate Bonds to boot, then Wellesley may be right for you. The "dividend strategy" is well-discussed and debated. Now, one may use Wellington for its intended purpose --- selected (and few) companies and Corporate Bonds in a managed Fund:
Vanguard wrote:The fund’s stock holdings are focused on companies that have historically paid a larger-than-average dividend or that have expectations of increasing dividends. This focus may provide a higher quarterly income distribution than non-income focused balanced funds.
That said, this strategy can also be established with Index Funds, and thus eliminating Manager risk. Here is a little something from Larry Swedroe.
http://www.cbsnews.com/8301-500395_162- ... ng-stocks/

Personally, I prefer a "total return" approach to Asset Allocation and the best manner in which to achieve it is through well diversified portfolio of non- or low-correlated Index Funds.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 12:34 pm
by Sidney
Diversification is a big factor to just be set aside.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 1:16 pm
by trico
I have been retired for two years, and have split my funds between Wellesley and Retirement Income. After looking at the returms of Wellesley since 1970, I can deal with that. So its a buy and hold fund for me. That way every quarter you get the income it produces, and I am reinvesting those back into the fund right now. I don't need the income yet, but I will in about 5 years. :moneybag

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 1:42 pm
by Erwin
trico wrote:I have been retired for two years, and have split my funds between Wellesley and Retirement Income. After looking at the returms of Wellesley since 1970, I can deal with that. So its a buy and hold fund for me. That way every quarter you get the income it produces, and I am reinvesting those back into the fund right now. I don't need the income yet, but I will in about 5 years. :moneybag
Do I understand that these are the only two funds you own in your retirement portfolio? Why did you pick the Vanguard Retirement Income fund?

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 2:07 pm
by ResNullius
I basically decided to create my own Wellesley Fund by putting 55% in fixed (mostly short and some intermediate investment grade at Vanguard) and 45% spit between SP500 and Total Market. Seems about right for us, but I think Wellesley and Wellington are great funds.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 2:36 pm
by FlyHi
I am a 73 year old retiree, I recently changed my 40/60 AA to:

10% CDs
5% I Bonds
12% VG Tgt Retirement Income
54% VG Wellesley Adm
18% Yachtman

I once considered using Wellesley as my only fund but was uncomfortable having all of my eggs in one basket. I feel that the 3 funds I am using give me the diveristy I am comfortable with.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 6:31 pm
by Sam I Am
Message deleted.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 6:57 pm
by Johm221122
If for the past 3,5,10 year periods this fund had underperformed its benchmark or its LCV and bonds had been out of favor would you still be interested?How would you feel if this is what happens over the next 10 years(growth bull market) (manager risk)

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 7:32 pm
by strafe
The risk/return characteristics of the Wellesley and Target Retirement Income funds are very similar. Wellesley carries slightly more risk, and consequently should have a slightly higher expected long-term return, but this may get lost in the noise over your investment time horizon. TR Income is slightly more conservative and far more diversified. The bottom line is that it will make very little difference whether you move it all into Wellesley or stick with both funds.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 10:06 pm
by Timcom99
Doing both Wellesley and the Vanguard Retirement Income will give you more diversification (Internationals And Medium And Small Caps And All). Keeping it all in Wellesley will keep things on the one fund stopping center. Wellesley is a great one stop fund by the way that is not very diverse but in history has given Great returns. (IMHO) Stay diverse with lots of Internationals and home market Domestic stocks as well as Bonds. Vanguard Wellesley is a Fantastic fund as a Core holding. (IMHO) Keep alot of it but get the Total International to stay diverse.

Re: Wellesley Income Fund

Posted: Wed Jun 27, 2012 10:52 pm
by stlutz
Out of 100 options of what you could do, going 100% Wellesley is better than at least 90 of them. The concerns that have been brought up here about diversification really only relate to the 35% stock portion. If you wanted 1/3 of your stock portfolio to be international, that's still only 12% of your portfolio--the end result of adding some international in isn't going to be *that* much different. Much more so about having 3 or 4% in small/midcap stocks.

Taxes are one issue worth considering, depending upon where your assets are located. For retired people with lots of interest income, muni bonds might be a better bet than Corporates (at least comparing bonds with the same amount of risk).

Re: Wellesley Income Fund

Posted: Thu Jun 28, 2012 5:25 am
by fidelio
there are several recent threads on this exact issue. it seems to come up frequently, as the fund does have pleasing performance. although having all your dollars on one active fund may be extreme, wellesley would be one of the few worth considering for such a role - imho. someday, when / if the bond market finally collapses, due to inflation forcing the fed to allow rates to rise, its n.a.v. will sink significantly, as most of its money is in intermediate corporate bonds. however, it has performed well since its inception -- but again remember that we're in a probably elderly 30+ year bond bull. this may not be the end of wellesley, as its rates would "catch up" in, say, five years, if the bond market maintains stability, but other secenarios are possible. see the other threads for more discussion of these issues.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 3:06 am
by Johm221122
fidelio wrote:there are several recent threads on this exact issue. it seems to come up frequently, as the fund does have pleasing performance. although having all your dollars on one active fund may be extreme, wellesley would be one of the few worth considering for such a role - imho. someday, when / if the bond market finally collapses, due to inflation forcing the fed to allow rates to rise, its n.a.v. will sink significantly, as most of its money is in intermediate corporate bonds. however, it has performed well since its inception -- but again remember that we're in a probably elderly 30+ year bond bull. this may not be the end of wellesley, as its rates would "catch up" in, say, five years, if the bond market maintains stability, but other secenarios are possible. see the other threads for more discussion of these issues.
mpt follower wrote:The more I look at Wellesley Income Fund, the more I like it as my only retirement fund (I have been retired for 8 years). Putting the issue of diversification aside, which I understand some may considered too limited, would you/does anyone place most/all of the retirement money in just this one fund? Today I have the money split equally in two funds, the Wellesley and the Vanguard Retirement Income, but I like much better Wellesley's strategy of investing in large value caps, high dividend stocks and the rest in corporate bonds. Also the 35% stock allocation matches my risk requirements.
My thought for just going with Wellesley is that if mutual funds did not exist and I was forced to build a portfolio of individual stocks and bonds, I would most likely try to be not far from the Wellesley's portfolio. Comments please?
Why consider one actively managed fund there is no reason too,but plenty of reasons not too?why take chance, it is not necessary. Yes it is/was/maybe a great fund but your taking risk for no reason
Edit: some people hold gold,just in case world crashes
Some will not put all money at vanguard in case vanguard crashes
You want to put all at one fund :?:

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 5:07 am
by BenBritt
Wife and I are retired and all Wellesley in tax deferred. Sleep well at night.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 10:30 am
by BigD53
Time for the "Wellesley Bashers" to come out of the closet again. Every time I see the Wellesley fund mentioned, the same old stale arguments pop up:

"I would never own an active fund!" "Wellesley has a lot of bonds!" "Wellesley will get hurt when interest rates rise!" "You don't have enough growth!" "Wellesley only has 60 stocks!"

Poppycock.

Since the inception of Wellesley in 1970, did interest rates never go up? Check the stats and see. How did the fund do? Great.

Since the inception of Wellesley in 1970, did having only 60 stocks ever hurt the fund? Nope.

Since the inception of Wellesley in 1970, what is the worst down year this "terrible active fund" has had? (Answer: it lost about 10%. One time.) I'm crushed!

Last time I checked, Jack Bogle owned Wellesley (and Wellington). The two "legacy" funds. And Jack knows a thing or two about funds. :happy

If it makes you uneasy, continue to split your money between Wellesley and the Target Retirement Income Fund. More diversity. (But I'll bet you a large pizza, that Wellesley will continue to outperform TR Income for years and years to come. Disclaimer: I own both funds. Either way, I win a pizza! :beer )

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 10:46 am
by Johm221122
BigD53 wrote:Time for the "Wellesley Bashers" to come out of the closet again. Every time I see the Wellesley fund mentioned, the same old stale arguments pop up:

"I would never own an active fund!" "Wellesley has a lot of bonds!" "Wellesley will get hurt when interest rates rise!" "You don't have enough growth!" "Wellesley only has 60 stocks!"

Poppycock.

Since the inception of Wellesley in 1970, did interest rates never go up? Check the stats and see. How did the fund do? Great.

Since the inception of Wellesley in 1970, did having only 60 stocks ever hurt the fund? Nope.

Since the inception of Wellesley in 1970, what is the worst down year this "terrible active fund" has had? (Answer: it lost about 10%. One time.) I'm crushed!

Last time I checked, Jack Bogle owned Wellesley (and Wellington). The two "legacy" funds. And Jack knows a thing or two about funds. :happy

If it makes you uneasy, continue to split your money between Wellesley and the Target Retirement Income Fund. More diversity. (But I'll bet you a large pizza, that Wellesley will continue to outperform TR Income for years and years to come. Disclaimer: I own both funds. Either way, I win a pizza! :beer )
Wellesley is a great fund,as long as you know what your buying.Yesterday guy got ticked off that it was suggested he put all his money at vanguard. Some people think your crazy if you don't have home safe full of gold.OPHas asked what people think,he has gotten answers.So whole point is it is a great fund with great history, but nobody knows future, so take information you have been given and make best choices you can

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 10:47 am
by trico
I agree with above except for the pizza. I don't eat pizza because I want to live longer, to about 100 or so. So I will enjoy those quarterly income checks from my Wellesley INcome Fund.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 11:24 am
by Grt2bOutdoors
There are many roads to Dublin, so goes the saying. If the investment lets you reach your goals with the amount of risk you are willing to absorb, there is no need to second guess it. Some are purists, some like to be creative - who cares, active or passive as long as the fees are reasonable and the returns materialize on a consistent basis. Reasonable - rock bottom cheap as compared to ridiculous, that is the difference. Many insitutional endowments/pensions pay much more for VC/Private Equity/Hedge Funds - if anyone want's to knock active management, go knock those.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 11:26 am
by Grt2bOutdoors
trico wrote:I agree with above except for the pizza. I don't eat pizza because I want to live longer, to about 100 or so. So I will enjoy those quarterly income checks from my Wellesley INcome Fund.
Wasn't aware that pizza is the sole cause of early death. What else do you exclude from your diet - food?

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 12:08 pm
by trico
All rainbow colored fruits and vegetables, moderate to light drinking and three different fish three times a week. Tuna, Salmon, Sardines. And 1200mg DHA/EPA fish oils. Cultures that have this in there regular diet live longer. Plus body mass index under 25.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 12:34 pm
by pc95
As a younger investor I am pretty conservative, and so I have both Wellsley and Wellington funds. I know they won't give you a home run, but they're shielded from the big down-gaps as well. I'll take the less return for less losses.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 12:40 pm
by investor
80% of my IRA egg is in a mixture of Wellington and Wellesley funds. Both funds have been very 'lucky' for a very very long time.
been retired 16 years and doing just fine.

investor

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 1:04 pm
by BigD53
trico wrote:I agree with above except for the pizza. I don't eat pizza because I want to live longer, to about 100 or so.

Ah heck, there's always a "health nut" in the group! :D

Age 80 is about my limit. Not much interested in going on after that. And the earlier I go, the happier my heirs will be! Pizza is probably the healthiest thing I eat! I get all the veggies on it. :)

But the way the world's economy is going, I'd better take up drinking! Excuse me, while I look for that "cheap Bourbon" thread....... 8-)

I think a simple combination of Wellesley and Target Retirement Income is a fine choice for conservative retirees. I even owned it before I was retired. I'm very conservative, have a COLA adjusted pension, and don't need to take all that much equity risk, if any.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 3:18 pm
by frose2
BigD53 wrote:Time for the "Wellesley Bashers" to come out of the closet again. Every time I see the Wellesley fund mentioned, the same old stale arguments pop up:

"I would never own an active fund!" "Wellesley has a lot of bonds!" "Wellesley will get hurt when interest rates rise!"
Disdain for active funds is one of the central tenets of Bogleheadedness. Wellesley does have a lot of longish bonds, and it will get hurt when the Fed runs out of ammunition and interest rates rise -- people are widely concerned about these things. None of these things constitutes "Wellesley bashing" but rather real concerns about what the economic future holds, applicable to many funds and investment strategies.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 3:49 pm
by FlyHi
Wasn't the makeup of the Target Retirement Fund changed last year? If so, you really can't compare the long term past performance of this fund against that of Wellesley!

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 4:20 pm
by Islander
Am in late retirement and 100% invested in Wellesley Income. Earlier, it was 50/50 Wellington/Wellesley.

For those with much longer time horizons, I think the LifeStrategy funds would be an excellent choice. However, as a retiree, caught in
what appears to be a secular bear market, I prefer proven active management as in the case of these two funds.

Re: Wellesley Income Fund

Posted: Fri Jul 13, 2012 4:50 pm
by draco
Time for the "Wellesley Bashers" to come out of the closet again. Every time I see the Wellesley fund mentioned, the same old stale arguments pop up:

"I would never own an active fund!" "Wellesley has a lot of bonds!" "Wellesley will get hurt when interest rates rise!" "You don't have enough growth!" "Wellesley only has 60 stocks!"

Poppycock.

Since the inception of Wellesley in 1970, did interest rates never go up? Check the stats and see. How did the fund do? Great.

Since the inception of Wellesley in 1970, did having only 60 stocks ever hurt the fund? Nope.

Since the inception of Wellesley in 1970, what is the worst down year this "terrible active fund" has had? (Answer: it lost about 10%. One time.) I'm crushed!

Last time I checked, Jack Bogle owned Wellesley (and Wellington). The two "legacy" funds. And Jack knows a thing or two about funds.

Wellesley 1971 - present

Only six down years. Worst being -9.8% in 2008 when the typical equity fund got hammered with 40% plus down. 14 years of 15% or greater return. 6-7 years of 20% +. Pretty good for a "conservative" fund. Should be considered as a core fund in any investment portfolio.