Global Wellington and Wellesley and fund size

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lassevirensghost
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Global Wellington and Wellesley and fund size

Post by lassevirensghost » Mon Sep 23, 2019 12:02 pm

Hi all. A question about the relatively new Global Wellington and Wellesley funds: it’s often argued that active funds run into problem as they accumulate money to invest and managers become limited in their options. Other arguments against active funds aside, wouldn’t this suggest that the global Ws could be much more nimble right now than their domestic and much B larger forebears? The style boxes suggest they already are large cap oriented so not sure how much it matters.

My wife holds positions in both for what that’s worth.
Last edited by lassevirensghost on Mon Sep 23, 2019 8:08 pm, edited 1 time in total.
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nisiprius
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Re: Global Ws and fund size

Post by nisiprius » Mon Sep 23, 2019 5:44 pm

Even in the Bogleheads forum, "Ws" doesn't convey much to me. I suggest you edit the subject line to be explicit: "Global Wellington and Wellesley." You can edit the subject line yourself, just click on the edit (pencil) icon and change the contents of the "Subject:" field in the posting.
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alex_686
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Re: Global Ws and fund size

Post by alex_686 » Mon Sep 23, 2019 6:12 pm

This is only true for a minority of active strategies. Such as low liquidity markets such as small cap. Or where there are limited opportunities, such as merger arbitrage. These funds don’t do these strategies so its not a concern.

columbia
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Re: Global Ws and fund size

Post by columbia » Mon Sep 23, 2019 7:05 pm

Nimble would imply a fair amount of trading, which isn’t necessarily the approach of these funds.

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lassevirensghost
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Re: Global Ws and fund size

Post by lassevirensghost » Mon Sep 23, 2019 8:08 pm

nisiprius wrote:
Mon Sep 23, 2019 5:44 pm
Even in the Bogleheads forum, "Ws" doesn't convey much to me.
Oh, that's funny. I guess I have seen those two funds referred to as such enough around here that I thought it was commonplace. Sorry, I will edit for clarity, though it looks like subsequent posts have more or less answered the question.

alex_686 wrote:
Mon Sep 23, 2019 6:12 pm
This is only true for a minority of active strategies. Such as low liquidity markets such as small cap. Or where there are limited opportunities, such as merger arbitrage. These funds don’t do these strategies so its not a concern.
Interesting. I suppose the reason I asked this question about the Global Wellington and Wellesley funds is because arguments about asset bloat have been levied against the domestic Wellington fund in particular. Granted, that fund is around $100B so it is much much larger.
“Groucho, how do you invest your money?” | “All in bonds.” | “But Groucho, they don’t pay much return.” | “They do when you have a lot of em!”

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jeffyscott
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Re: Global Wellington and Wellesley and fund size

Post by jeffyscott » Tue Sep 24, 2019 1:49 pm

Smaller asset base would allow the global funds to take a meaningful position in smaller companies. IDK if they choose to actually do so or not.

With $100 billion, 1% of assets would be $1 billion and that would be, for example, 5% of a company with $20 billion market cap. I'd guess that'd be somewhere around the smallest company Wellington would consider :?: , while Global could go much smaller.
Time is your friend; impulse is your enemy. - John C. Bogle

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lassevirensghost
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Re: Global Ws and fund size

Post by lassevirensghost » Tue Sep 24, 2019 2:11 pm

columbia wrote:
Mon Sep 23, 2019 7:05 pm
Nimble would imply a fair amount of trading, which isn’t necessarily the approach of these funds.
Yes, imprecise language on my part. I am thinking I need imagery more along the lines of a small child or animal that can wiggle themselves into small spaces when regular size adults cannot.
“Groucho, how do you invest your money?” | “All in bonds.” | “But Groucho, they don’t pay much return.” | “They do when you have a lot of em!”

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