Vanguard's Wellesley Income fund is incredible

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Re: Vanguard's Wellesley Income fund is incredible

Post by abuss368 » Tue Jan 14, 2020 8:17 pm

Blue456 wrote:
Tue Jan 14, 2020 7:24 pm
Triple digit golfer wrote:
Tue Jan 14, 2020 6:48 pm
Blue456 wrote:
Tue Jan 14, 2020 5:26 pm
Triple digit golfer wrote:
Tue Jan 14, 2020 2:17 pm

I see many using it in taxable accounts. Again, Bogleheads philosophy, "Minimize taxes."
What’s more important minimizing taxes or after tax return?
After tax returns.
Wellesley after tax return despite being "tax inefficient" beats Vanguard Life Strategy Moderate Growth and Target Retirement Income Fund.
https://investor.vanguard.com/mutual-fu ... ance/vsmgx
https://personal.vanguard.com/us/funds/ ... =INT#tab=1
https://personal.vanguard.com/us/funds/ ... true#tab=1
There is no point of minimizing taxes and giving up returns.
In my opinion, making investment decisions based only on tax considerations, while important, may be a mistake.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Vanguard's Wellesley Income fund is incredible

Post by Bluce » Tue Jan 14, 2020 8:31 pm

abuss368 wrote:
Tue Jan 14, 2020 8:17 pm
In my opinion, making investment decisions based only on tax considerations, while important, may be a mistake.
I agree.

It comes down to this (numbers are just random, to make the point): At the end of the year would you rather have paid $20k in taxes but have $50k in your pocket, or have paid $10k in taxes but only $30k in your pocket?

Being self-employed I get into these debates all the time by the "You can write everything off!" no-knowledge crowd. I am taxed on how much money I have left over, just like anyone else who has personal exemptions.
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Re: Vanguard's Wellesley Income fund is incredible

Post by abuss368 » Tue Jan 14, 2020 8:50 pm

Bluce wrote:
Tue Jan 14, 2020 8:31 pm
abuss368 wrote:
Tue Jan 14, 2020 8:17 pm
In my opinion, making investment decisions based only on tax considerations, while important, may be a mistake.
I agree.

It comes down to this (numbers are just random, to make the point): At the end of the year would you rather have paid $20k in taxes but have $50k in your pocket, or have paid $10k in taxes but only $30k in your pocket?

Being self-employed I get into these debates all the time by the "You can write everything off!" no-knowledge crowd. I am taxed on how much money I have left over, just like anyone else who has personal exemptions.
Agree. It is after tax return that is important.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Vanguard's Wellesley Income fund is incredible

Post by ramonsito » Tue Jan 14, 2020 8:57 pm

As Taylor Larimore is fond of saying, "There are many roads to Dublin." While many if not most Bogleheads implement a 3-fund (or a 2-fund) approach to their AA, some Bogleheads stray from the straight and narrow path by using actively managed funds like Wellesley and/or Wellington. Some Bogleheads even dare to invest in individual stocks from time to time (in full knowledge of the risks). There really is no single, correct way. We all have our preferences, of course. One benefit of the Boglehead community is to gain insight from other like-minded investors (not clone-minded, but of a similar mindset). A key similarity is the tendency to save in a disciplined manner, and to put that capital to work in [mostly] passive index funds. Wellesley and Wellington have absolutely outstanding records, and it is probable that their success will continue (no guarantees, of course). Best wishes to each of you. My thanks to your aggregate wisdom.

R.

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Re: Vanguard's Wellesley Income fund is incredible

Post by AerialWombat » Wed Jan 15, 2020 12:34 am

lassevirensghost wrote:
Tue Jan 14, 2020 7:49 pm
Is the $75 for the initial purchase or do you pay that much each time you add to the position?
Fidelity charges the $75 transaction fee on every purchase, unless you set up automatic investments (then it’s just $5 per transaction).

This is the only reason I do not own Wellesley in my Roth.

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Re: Vanguard's Wellesley Income fund is incredible

Post by Jerry55 » Wed Jan 15, 2020 12:39 am

willthrill81 wrote:
Tue Jan 14, 2020 7:25 pm
Never let the tax tail wag the investment dog.

So very true. Just because someone has Wellesley doesn't mean it's their ONLY holding.
I have Wellesley, but in a ROTH IRA account, primarily due to a VCP conversion that I maxed out, as far as the amount I could contribute
(6 figures). I DID put the remainder into Wellington taxable, but, I also hold my TSP account which comprises 75% of my holdings.

Sometimes, people have to remember that, just because it may not be "Tax Efficient" for them, doesn't mean that's what others are striving for.
Different Strokes for Different Folks I always say....I don't know their intentions, nor would I try to tell them that they're wrong.
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Re: Vanguard's Wellesley Income fund is incredible

Post by dkturner » Wed Jan 15, 2020 4:32 pm

I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.

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Re: Vanguard's Wellesley Income fund is incredible

Post by DB2 » Wed Jan 15, 2020 4:49 pm

dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
I cannot help but think 'picking' the right value stocks has been key during the Growth stock boom. Some believe Value as a whole is going to come back again and if it does, it will be interesting. I also wonder if the actively managed component with bonds is really a bigger benefit than realized vs index bonds.

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Re: Vanguard's Wellesley Income fund is incredible

Post by columbia » Wed Jan 15, 2020 7:09 pm

dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Vanguard's Wellesley Income fund is incredible

Post by abuss368 » Wed Jan 15, 2020 7:10 pm

columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Who knows what the future holds but thus far Jack Bogle has been correct.
John C. Bogle: Two Fund Portfolio - Total Stock & Total Bond - “Simplicity is the master key to financial success."

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Re: Vanguard's Wellesley Income fund is incredible

Post by columbia » Wed Jan 15, 2020 7:12 pm

👍🏻 Indeed
If you leave your head in the sand for too long, you might get run over by a Jeep.

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Re: Vanguard's Wellesley Income fund is incredible

Post by dkturner » Thu Jan 16, 2020 8:09 am

columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally, I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.

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Re: Vanguard's Wellesley Income fund is incredible

Post by DB2 » Thu Jan 16, 2020 9:24 am

As of 12/31/19, according to the Vanguard site, Wellesley is actually holding 40.88% in equities.

The investment policy is pretty interesting especially in regards to international. I do like the agility.

https://investor.vanguard.com/mutual-fu ... olio/vwinx

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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Thu Jan 16, 2020 9:47 am

When I provided the update for 2019's returns, I didn't mention that 2019 was the fund's record year in terms of highest returns.
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Re: Vanguard's Wellesley Income fund is incredible

Post by Bluce » Thu Jan 16, 2020 9:49 am

willthrill81 wrote:
Thu Jan 16, 2020 9:47 am
When I provided the update for 2019's returns, I didn't mention that 2019 was the fund's record year in terms of highest returns.
And it's probably because bonds also did very well in addition to stocks being up 30+%.
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Re: Vanguard's Wellesley Income fund is incredible

Post by KlangFool » Thu Jan 16, 2020 9:53 am

dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally, I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
dkturner,

Is it possible that the superior performance of the Wellesley versus LifeStrategy Conservative Growth has to do with the fixed income side? I do not believe I see the similar outperformance of the Wellington fund versus the LifeStrategy Moderate Growth.

I do not know the answer. Could you please verify?

https://investor.vanguard.com/mutual-fu ... ance/vwenx
https://investor.vanguard.com/mutual-fu ... ance/vwiax

As per the Vanguard's information, VWENX did not beat its benchmark and VWIAX did. Given that they use the same Wellington management for their stock selection, it would seem like it is the fixed income/bond side that gives the win to VWIAX.

KlangFool

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Re: Vanguard's Wellesley Income fund is incredible

Post by rkhusky » Thu Jan 16, 2020 10:06 am

dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
Are you sure that it is value that was the contributor, or is it that large cap stocks out-performed small and US outperformed Int'l? And/or perhaps it is corporate bonds vs treasury bonds?

I note that during the 5-year period from 2003-2007, LS Cons Growth out-performed Wellesley. So, for any strategy, one needs to be able to stick through longish periods of under-performance without changing course.
Last edited by rkhusky on Thu Jan 16, 2020 10:13 am, edited 1 time in total.

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Re: Vanguard's Wellesley Income fund is incredible

Post by B. Wellington » Thu Jan 16, 2020 10:06 am

dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally,
I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
And there it is...Why some prefer the W/W funds. I believe it has to do more with the bond side (more) than the stock side, especially for Wellesley.

I see Klangfool beat me to it. :sharebeer

Disclosure: Been investing with Wellington Management for many, many years. Along with the Balanced Index fund (which was the Vanguard Asset Allocation fund that merged with the Balanced Index I believe in 2011.

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Re: Vanguard's Wellesley Income fund is incredible

Post by TheDDC » Thu Jan 16, 2020 10:13 am

B. Wellington wrote:
Thu Jan 16, 2020 10:06 am
dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally,
I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
And there it is...Why some prefer the W/W funds. I believe it has to do more with the bond side (more) than the stock side, especially for Wellesley.

I see Klangfool beat me to it. :sharebeer

Disclosure: Been investing with Wellington Management for many, many years. Along with the Balanced Index fund (which was the Vanguard Asset Allocation fund that merged with the Balanced Index I believe in 2011.
Bingo. I can't get past the futility of "investing" in bond funds and don't keep them in my own portfolio, but I would gladly pay the Vanguard price (16 bps) for a bond fund manager to navigate the complexities of the debt market if I wanted to keep my funds "stable" in the short term. 10% of those international securities held in Wellesley are international bonds. I doubt most investors even care to understand international bonds.

We all know that active management isn't *bad* when it's cheap, with no loads, and when it actually performs (or maybe even outperform). If you want active management, you have a fighting chance with Vanguard. I have a tough time finding cheap, well performing, active funds elsewhere. This is also why W/W is, culturally, most fitting with the mindset of a "hands off" retiree.

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Re: Vanguard's Wellesley Income fund is incredible

Post by FactualFran » Thu Jan 16, 2020 2:00 pm

willthrill81 wrote:
Thu Jan 16, 2020 9:47 am
When I provided the update for 2019's returns, I didn't mention that 2019 was the fund's record year in terms of highest returns.
According to the annual total return history of the Vanguard Wellesley fund at Yahoo, the highest return was 28.91% for 1995. Not the 16.39% for 2019.

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Re: Vanguard's Wellesley Income fund is incredible

Post by dkturner » Thu Jan 16, 2020 2:09 pm

KlangFool wrote:
Thu Jan 16, 2020 9:53 am
dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally, I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
dkturner,

Is it possible that the superior performance of the Wellesley versus LifeStrategy Conservative Growth has to do with the fixed income side? I do not believe I see the similar outperformance of the Wellington fund versus the LifeStrategy Moderate Growth.

I do not know the answer. Could you please verify?

https://investor.vanguard.com/mutual-fu ... ance/vwenx
https://investor.vanguard.com/mutual-fu ... ance/vwiax

As per the Vanguard's information, VWENX did not beat its benchmark and VWIAX did. Given that they use the same Wellington management for their stock selection, it would seem like it is the fixed income/bond side that gives the win to VWIAX.

KlangFool
The bond holdings of Wellesley and Wellington are very similar, not so for the equity holdings. If you go to the Vanguard website, and look at the holdings of these two funds, you will see the differences.

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Re: Vanguard's Wellesley Income fund is incredible

Post by Electron » Thu Jan 16, 2020 2:14 pm

The incredible performance of Wellesley Income since 2000 has been mentioned many times in this thread, but the chart is still worth viewing for those who haven't seen it. Note the performance relative to the S&P 500 from that starting date.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

The tech bubble was a very interesting period with growth significantly outperforming value for many years. After the peak, there was a reversal and value stocks took the lead for a period of time. Bonds performed very well and that performance continued in the decades that followed.
Electron

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Re: Vanguard's Wellesley Income fund is incredible

Post by S_Track » Thu Jan 16, 2020 2:17 pm

dkturner wrote:
Thu Jan 16, 2020 2:09 pm
KlangFool wrote:
Thu Jan 16, 2020 9:53 am
dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally, I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
dkturner,

Is it possible that the superior performance of the Wellesley versus LifeStrategy Conservative Growth has to do with the fixed income side? I do not believe I see the similar outperformance of the Wellington fund versus the LifeStrategy Moderate Growth.

I do not know the answer. Could you please verify?

https://investor.vanguard.com/mutual-fu ... ance/vwenx
https://investor.vanguard.com/mutual-fu ... ance/vwiax

As per the Vanguard's information, VWENX did not beat its benchmark and VWIAX did. Given that they use the same Wellington management for their stock selection, it would seem like it is the fixed income/bond side that gives the win to VWIAX.

KlangFool
The bond holdings of Wellesley and Wellington are very similar, not so for the equity holdings. If you go to the Vanguard website, and look at the holdings of these two funds, you will see the differences.
I think Wellesley selects large companies that currently distribute higher dividends compared to the others. Wellington is not limited to this.

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Re: Vanguard's Wellesley Income fund is incredible

Post by KlangFool » Thu Jan 16, 2020 2:28 pm

dkturner wrote:
Thu Jan 16, 2020 2:09 pm
KlangFool wrote:
Thu Jan 16, 2020 9:53 am
dkturner wrote:
Thu Jan 16, 2020 8:09 am
columbia wrote:
Wed Jan 15, 2020 7:09 pm
dkturner wrote:
Wed Jan 15, 2020 4:32 pm
I’ve been tracking the performance of Wellesley versus the Vanguard LifeStrategy Conservative Growth Fund since 1995. For the last 25 years Wellesley has produced annualized returns of 8.55% compared to 6.99% for LifeStrategy Conservative Growth. What I find interesting is over the last 10 years, when “value” stocks trailed the performance of the broad market, Wellesley produced annualized returns of 8.05% compared to 6.61% for LifeStrategy Conservative Growth. So much for the value premium is dead theory.
International has dragged down that life strategy fund, of course.
Currently 15% of the equities in Wellesley are international - it has varied over time. Over the last 25 years there were times when LifeStrategy Conservative Growth only held 20%-30% of its equity exposure in international equities. In addition, Wellesley’s total equity exposure is usually in the 35-37% range while LifeStrategy Conservative Growth has had a fixed 40% equity allocation. I’ve read on these boards that the composition of the LifeStrategy funds was designed by the “experts” at Vanguard. Personally, I’d rather trust the folks at Wellington Management to determine the allocation of the assets in my mutual fund. I like their mandate to move allocations around when they believe it’s in my best interests.
dkturner,

Is it possible that the superior performance of the Wellesley versus LifeStrategy Conservative Growth has to do with the fixed income side? I do not believe I see the similar outperformance of the Wellington fund versus the LifeStrategy Moderate Growth.

I do not know the answer. Could you please verify?

https://investor.vanguard.com/mutual-fu ... ance/vwenx
https://investor.vanguard.com/mutual-fu ... ance/vwiax

As per the Vanguard's information, VWENX did not beat its benchmark and VWIAX did. Given that they use the same Wellington management for their stock selection, it would seem like it is the fixed income/bond side that gives the win to VWIAX.

KlangFool
The bond holdings of Wellesley and Wellington are very similar, not so for the equity holdings. If you go to the Vanguard website, and look at the holdings of these two funds, you will see the differences.
dkturner,

But,

Wellington fund is a 65/35 fund

Wellesley fund is a 35/65 fund.

If Wellesley outperforms another 35/65 fund, it is possible the bond side that is causing the outperformance. As for the Wellington fund, the 35% bond side might be outperforming but it is not big enough to compensate for the underperformance of LCV versus the market.

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Re: Vanguard's Wellesley Income fund is incredible

Post by S_Track » Thu Jan 16, 2020 2:31 pm

Electron wrote:
Thu Jan 16, 2020 2:14 pm
The incredible performance of Wellesley Income since 2000 has been mentioned many times in this thread, but the chart is still worth viewing for those who haven't seen it. Note the performance relative to the S&P 500 from that starting date.

http://quotes.morningstar.com/chart/fun ... A%5B%5D%7D

The tech bubble was a very interesting period with growth significantly outperforming value for many years. After the peak, there was a reversal and value stocks took the lead for a period of time. Bonds performed very well and that performance continued in the decades that followed.
Thanks for the chart, very good past performance. I use Wellesley in my three fund, I mix 25% Wellesley with VG Life Strategy conservative growth, then add Total Stock until I reached my desired aa.

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Re: Vanguard's Wellesley Income fund is incredible

Post by KlangFool » Thu Jan 16, 2020 2:32 pm

S_Track wrote:
Thu Jan 16, 2020 2:17 pm

I think Wellesley selects large companies that currently distribute higher dividends compared to the others. Wellington is not limited to this.
S_Track,

I do not know. That is why I asked. But, logically, Wellesley is a 35/65 fund. If it outperforms a 40/60 fund, it could be due to the bond side.

<<I think Wellesley selects large companies that currently distribute higher dividends compared to the others.>>

If that is true, Wellesley's stock side would be underperforming as compared to the market index. The market index is beating LCV because LCG is doing so well.

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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Thu Jan 16, 2020 2:56 pm

FactualFran wrote:
Thu Jan 16, 2020 2:00 pm
willthrill81 wrote:
Thu Jan 16, 2020 9:47 am
When I provided the update for 2019's returns, I didn't mention that 2019 was the fund's record year in terms of highest returns.
According to the annual total return history of the Vanguard Wellesley fund at Yahoo, the highest return was 28.91% for 1995. Not the 16.39% for 2019.
Good catch.
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Re: Vanguard's Wellesley Income fund is incredible

Post by DB2 » Thu Jan 16, 2020 3:43 pm

Klangfool has a good point. However, perhaps the stock picking is not only helping on the bond side but also the LCV side despite the overall performance of Value being disappointing the last 10 -15 years relatively speaking (compared to overall market and Growth).

With that said, I ran across an interesting article about greater rotation into LCV as of late:

https://www.cnbc.com/2020/01/16/the-hug ... -says.html

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Re: Vanguard's Wellesley Income fund is incredible

Post by Unladen_Swallow » Thu Jan 16, 2020 5:55 pm

Bluce wrote:
Tue Jan 14, 2020 8:31 pm
abuss368 wrote:
Tue Jan 14, 2020 8:17 pm
In my opinion, making investment decisions based only on tax considerations, while important, may be a mistake.
I agree.

It comes down to this (numbers are just random, to make the point): At the end of the year would you rather have paid $20k in taxes but have $50k in your pocket, or have paid $10k in taxes but only $30k in your pocket?

Being self-employed I get into these debates all the time by the "You can write everything off!" no-knowledge crowd. I am taxed on how much money I have left over, just like anyone else who has personal exemptions.
I laughed at this. I can empathize. :beer
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Re: Vanguard's Wellesley Income fund is incredible

Post by hoops777 » Thu Jan 16, 2020 6:24 pm

It is also possible that they just have excellent stock pickers
K.I.S.S........so easy to say so difficult to do.

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Re: Vanguard's Wellesley Income fund is incredible

Post by Bluce » Thu Jan 16, 2020 6:56 pm

Unladen_Swallow wrote:
Thu Jan 16, 2020 5:55 pm
Bluce wrote:
Tue Jan 14, 2020 8:31 pm
abuss368 wrote:
Tue Jan 14, 2020 8:17 pm
In my opinion, making investment decisions based only on tax considerations, while important, may be a mistake.
I agree.

It comes down to this (numbers are just random, to make the point): At the end of the year would you rather have paid $20k in taxes but have $50k in your pocket, or have paid $10k in taxes but only $30k in your pocket?

Being self-employed I get into these debates all the time by the "You can write everything off!" no-knowledge crowd. I am taxed on how much money I have left over, just like anyone else who has personal exemptions.
I laughed at this. I can empathize. :beer
:sharebeer Not to be a jerk, but it seems the only people (that I run into, anyway) who understand how the tax system works for self-employeds is accountants, the IRS, or other self-employeds. It works the same way as people who are not self-employed: You are taxed on how much money you have left over after (allowed, legitimate) expenses.

Expenses in business is money you no longer have; it is gone. You spent it in order to produce your gross income.
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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Wed Mar 11, 2020 4:13 pm

As of yesterday, the YTD return of Wellesley in Admiral shares was -2.42%. That's a yawner in a very good way.

Over the last year, VWIAX is up 8.43%. It's just been the little engine that could.
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Re: Vanguard's Wellesley Income fund is incredible

Post by mhlambert » Wed Mar 11, 2020 4:31 pm

I opened my Roth IRA by dropping $2K into Wellesley in 1998.

This was long before I'd ever considered index funds or anything approaching a Bogleheads philosophy. Now it's the only non-index holding I have. I just can't find any reason to sell it.

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Re: Vanguard's Wellesley Income fund is incredible

Post by Harry Livermore » Wed Mar 11, 2020 5:28 pm

Not much to add to the discussion but I have been thrilled with Wellesely. Between our various accounts, my wife and I have +/- 25% of our liquid net worth in it. The returns over the last few years have been very satisfying, and the protection to the downside in the current correction awesome.
Cheers

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Re: Vanguard's Wellesley Income fund is incredible

Post by KEotSK66 » Wed Mar 11, 2020 7:51 pm

when I retire I'll be vwinx whole hog (ex ef)
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Re: Vanguard's Wellesley Income fund is incredible

Post by Mr.BB » Wed Mar 11, 2020 7:56 pm

VWINX and PRWCX account for 20% of our portfolio. Very happy with both. They provide a lot of stability.
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Re: Vanguard's Wellesley Income fund is incredible

Post by Blue456 » Wed Mar 11, 2020 8:02 pm

So how does VWINX compare to regular 40/60 since the beginning of the year?

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Re: Vanguard's Wellesley Income fund is incredible

Post by Triple digit golfer » Wed Mar 11, 2020 8:10 pm

Blue456 wrote:
Wed Mar 11, 2020 8:02 pm
So how does VWINX compare to regular 40/60 since the beginning of the year?
40/60 has beaten it in 2020.

Not that it is relevant at all.

https://www.portfoliovisualizer.com/bac ... tion3_2=60

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Re: Vanguard's Wellesley Income fund is incredible

Post by Blue456 » Thu Mar 12, 2020 10:27 am

So let’s say stocks crash by 80%. Will Wellesley rebalance it’s bonds back to 40/60? Or are they going to stay unbalance at now 10/90?

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Re: Vanguard's Wellesley Income fund is incredible

Post by sixtyforty » Thu Mar 12, 2020 10:35 am

Triple digit golfer wrote:
Wed Mar 11, 2020 8:10 pm
Blue456 wrote:
Wed Mar 11, 2020 8:02 pm
So how does VWINX compare to regular 40/60 since the beginning of the year?
40/60 has beaten it in 2020.

Not that it is relevant at all.

https://www.portfoliovisualizer.com/bac ... tion3_2=60
When March numbers are included, it may favor Wellesley.
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Re: Vanguard's Wellesley Income fund is incredible

Post by sixtyforty » Thu Mar 12, 2020 5:14 pm

Today:

40(VTI)/60(BND) : -7.144%

Wellesley: - 4.57%

Not bad considering how brutal this market is.
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Re: Vanguard's Wellesley Income fund is incredible

Post by 1789 » Thu Mar 12, 2020 5:15 pm

This is one of the two greatest Vanguard funds, imo. Along with Wellington
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Re: Vanguard's Wellesley Income fund is incredible

Post by pshonore » Thu Mar 12, 2020 5:23 pm

sixtyforty wrote:
Thu Mar 12, 2020 5:14 pm
Today:

40(VTI)/60(BND) : -7.144%

Wellesley: - 4.57%

Not bad considering how brutal this market is.
That makes it about -8.8% YTD.

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Re: Vanguard's Wellesley Income fund is incredible

Post by Blue456 » Fri Mar 13, 2020 6:37 am

I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.

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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Thu Jun 04, 2020 1:28 pm

Wellesley is already back in the black for 2020, +.59% year to date.
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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Thu Jun 04, 2020 1:29 pm

Blue456 wrote:
Fri Mar 13, 2020 6:37 am
I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.
-17.4% was the max drawdown this year.
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Re: Vanguard's Wellesley Income fund is incredible

Post by aristotelian » Thu Jun 04, 2020 1:44 pm

Blue456 wrote:
Fri Mar 13, 2020 6:37 am
I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.
Appears to have bottomed out at about -9%. Bonds held up nicely this time.

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Re: Vanguard's Wellesley Income fund is incredible

Post by willthrill81 » Thu Jun 04, 2020 1:46 pm

aristotelian wrote:
Thu Jun 04, 2020 1:44 pm
Blue456 wrote:
Fri Mar 13, 2020 6:37 am
I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.
Appears to have bottomed out at about -9%. Bonds held up nicely this time.
That's looking at monthly data. Looking at daily data, the drawdown was -17.4%.
“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

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Re: Vanguard's Wellesley Income fund is incredible

Post by aristotelian » Thu Jun 04, 2020 1:52 pm

willthrill81 wrote:
Thu Jun 04, 2020 1:46 pm
aristotelian wrote:
Thu Jun 04, 2020 1:44 pm
Blue456 wrote:
Fri Mar 13, 2020 6:37 am
I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.
Appears to have bottomed out at about -9%. Bonds held up nicely this time.
That's looking at monthly data. Looking at daily data, the drawdown was -17.4%.
Ah, good catch. The volatility in March was crazy. A few days made a huge difference.

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Re: Vanguard's Wellesley Income fund is incredible

Post by pop77 » Thu Jun 04, 2020 1:54 pm

willthrill81 wrote:
Thu Jun 04, 2020 1:46 pm
aristotelian wrote:
Thu Jun 04, 2020 1:44 pm
Blue456 wrote:
Fri Mar 13, 2020 6:37 am
I wonder what will be the maximum drawdown of Wellesley Income Fund during this recession. I think in 2008-2009 it was 18%.
Appears to have bottomed out at about -9%. Bonds held up nicely this time.
That's looking at monthly data. Looking at daily data, the drawdown was -17.4%.
Does this mean if you can hold off selling for a month from the time you need the funds, the max drown is almost halved?

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