Vanguard Wellington and Wellsley over the last 20 years

Discuss all general (i.e. non-personal) investing questions and issues, investing news, and theory.
mjb
Posts: 129
Joined: Sat Nov 30, 2013 11:43 am

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by mjb » Sat May 11, 2019 12:33 pm

Bogle has highlighted time and again that Wellington basically follows a large cap value / dividend appreciation index and a log term Corp bond index. And as shown above, this basically plays out.

People forget that one advantage "closet index funds" have is they can add stocks and bonds before they are added to a major index and remove stocks and bonds prior to being dropped from a major index, pocketing the gain and limiting the loss.

As has been noted, a few other funds have succeeded with this strategy. It isn't super popular elsewhere because it underperforms in bull markets.

I doubt Wellington will change strategy any time soon, as it is a cheap strategy that has won them lots of fans.

Full disclosure, I run two strategies. One is Wellington, and the other is a more traditional broad U.S. and Int index along with an intermediate term bond index fund (I like riding the yield curve when interest rates are low).

User avatar
willthrill81
Posts: 14040
Joined: Thu Jan 26, 2017 3:17 pm
Location: USA

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by willthrill81 » Sat May 11, 2019 4:01 pm

mjb wrote:
Sat May 11, 2019 12:33 pm
Bogle has highlighted time and again that Wellington basically follows a large cap value / dividend appreciation index and a log term Corp bond index. And as shown above, this basically plays out.

People forget that one advantage "closet index funds" have is they can add stocks and bonds before they are added to a major index and remove stocks and bonds prior to being dropped from a major index, pocketing the gain and limiting the loss.

As has been noted, a few other funds have succeeded with this strategy. It isn't super popular elsewhere because it underperforms in bull markets.

I doubt Wellington will change strategy any time soon, as it is a cheap strategy that has won them lots of fans.

Full disclosure, I run two strategies. One is Wellington, and the other is a more traditional broad U.S. and Int index along with an intermediate term bond index fund (I like riding the yield curve when interest rates are low).
"It's hard to argue with long-term results unless you're a Boglehead." :wink:
-willthrill81
“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

Explorer
Posts: 267
Joined: Thu Oct 13, 2016 7:54 pm

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Explorer » Sat May 11, 2019 5:42 pm

mjb wrote:
Sat May 11, 2019 12:33 pm

Full disclosure, I run two strategies. One is Wellington, and the other is a more traditional broad U.S. and Int index along with an intermediate term bond index fund (I like riding the yield curve when interest rates are low).
I employ multiple strategies: 1) index allocation, 2) low-cost active balanced funds (Wellesley & STAR), 3) specialty funds like PIMIX (multisector bond fund with go-anywhere approach with synthetic instruments to control duration and risk) and DSEEX (Doubleline CAPE sector rotation fund also employs synthetic swaps in lieu of equity while deploying cash in fixed income instruments).

No single strategy is the "be all end all" - diversification of strategies is always recommended as the nest egg gets larger. 15% of US total stock market is in invested in just 5 tech stocks Microsoft, Apple, Amazon, Facebook and Google. Just realize that the diversification you think you are getting in a TSM fund is not what the financial press will lead you to believe. By contrast Wellesley and Wellington offer better sector diversification and less individual stock risk than TSM.

User avatar
Jerry55
Posts: 698
Joined: Tue Jan 27, 2015 1:56 am
Location: That Toddlin' Town

Post by Jerry55 » Sun May 12, 2019 12:23 am

tennisplyr wrote:
Wed May 08, 2019 4:32 pm
Have held both of these funds for the last 10 years....no regrets.
Same here. I also have had these two for almost 9 years and I love them for what they are, not what they COULD be.
They are an integral part of my investment strategy as such....

Wellesley (ROTH IRA) at 20%
Wellington (Taxable) at 12%

The rest is in my TSP - C fund (80%) and S and I (10% each) totaling ~ 60%
The rest being MM and 26 week T-Bills

I sleep well with the W's for sure !
Retired CSRS on 12/19/2012 @ age 57 w/39 years | Good Bye Tension, Hello Pension !!!

Cheyenne
Posts: 488
Joined: Sun Jun 14, 2015 6:46 am

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Cheyenne » Sun May 12, 2019 7:50 am

Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington

Explorer
Posts: 267
Joined: Thu Oct 13, 2016 7:54 pm

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Explorer » Sun May 12, 2019 7:54 am

Cheyenne wrote:
Sun May 12, 2019 7:50 am
Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington
To me, it does NOT make sense. They are very similar except the allocation. I would rather diversify with another strategy (indexing, funds that use modern financial tools etc). See my post a few messages above to get my thoughts.

columbia
Posts: 2010
Joined: Tue Aug 27, 2013 5:30 am

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by columbia » Sun May 12, 2019 8:07 am

Cheyenne wrote:
Sun May 12, 2019 7:50 am
Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington
If that’s what seems most comfortable for you, then sure.
One could do a lot worse.

I very well might have this allocation in my Roth in the years preceding retirement.

dbr
Posts: 30860
Joined: Sun Mar 04, 2007 9:50 am

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by dbr » Sun May 12, 2019 6:51 pm

Cheyenne wrote:
Sun May 12, 2019 7:50 am
Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington
It would if you wanted the kind of assets and management those funds give you but you wanted to hit an asset allocation between the two.

Just in general, there is not enough information to answer your question.

Cheyenne
Posts: 488
Joined: Sun Jun 14, 2015 6:46 am

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Cheyenne » Sun May 12, 2019 7:32 pm

dbr wrote:
Sun May 12, 2019 6:51 pm
Cheyenne wrote:
Sun May 12, 2019 7:50 am
Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington
It would if you wanted the kind of assets and management those funds give you but you wanted to hit an asset allocation between the two.
Your reply did answer my question. Thanks.

User avatar
Socrates
Posts: 417
Joined: Sun May 13, 2018 10:27 pm
Location: Margaritaville

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Socrates » Sun May 12, 2019 8:33 pm

Would it make sense to hold 50% of each?

50% Wellesley
50% Wellington
I have read many people here do that....at least for part of their portfolio

I have both.....both are terrific low cost funds, IMHO
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

User avatar
Socrates
Posts: 417
Joined: Sun May 13, 2018 10:27 pm
Location: Margaritaville

Re: Vanguard Wellington and Wellsley over the last 20 years

Post by Socrates » Sun May 12, 2019 8:36 pm

I employ multiple strategies: 1) index allocation, 2) low-cost active balanced funds (Wellesley & STAR), 3) specialty funds like PIMIX (multisector bond fund with go-anywhere approach with synthetic instruments to control duration and risk) and DSEEX (Doubleline CAPE sector rotation fund also employs synthetic swaps in lieu of equity while deploying cash in fixed income instruments).
I do too.....

1. Index funds TSM, Small cap value, REIT, etc.
2. Low cost actively managed funds like Wellesley, Wellington and Vanguard Healthcare
3. Big fan of PIMIX

:sharebeer
“Don't waste your time looking back. You're not going that way.” ― Ragnar Lothbrok.

Post Reply