WellCore for 50/50 of Wellesley/Wellington?

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walescynwyd
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WellCore for 50/50 of Wellesley/Wellington?

Post by walescynwyd »

After reading this article, I wonder why Wellington Management Company that manages Wellesley Fund and Wellington Fund isn't offer a 50/50 product, say "WellCore Fund". Thoughts?

By the way, ChatGPT, not me picked the name WellCore. Below is how I asked it :-)
Pick a name of a new fund, the name of which should be only two words and the first word's spelling should start with four letters "Well", whose portfolio consists only two funds of equal weight (50/50), one of which is Wellington Fund (65 equity / 35 bond), and the other of which is Wellesley Fund (35 equity / 65 bond).
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Charles Joseph
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Charles Joseph »

walescynwyd wrote: Sat Jul 22, 2023 10:09 pm After reading this article, I wonder why Wellington Management Company that manages Wellesley Fund and Wellington Fund isn't offer a 50/50 product, say "WellCore Fund". Thoughts?

By the way, ChatGPT, not me picked the name WellCore. Below is how I asked it :-)
Pick a name of a new fund, the name of which should be only two words and the first word's spelling should start with four letters "Well", whose portfolio consists only two funds of equal weight (50/50), one of which is Wellington Fund (65 equity / 35 bond), and the other of which is Wellesley Fund (35 equity / 65 bond).
This is a great idea.
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ScooterBob
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by ScooterBob »

I'm sure that the management at Wellington has thought of this but there's probably a reason not to upset the two mainstay funds. Just a hunch. I would love a fund like Wellcore. Simplification is a good thing.
GaryA505
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by GaryA505 »

ScooterBob wrote: Sat May 04, 2024 12:20 pm I'm sure that the management at Wellington has thought of this but there's probably a reason not to upset the two mainstay funds. Just a hunch. I would love a fund like Wellcore. Simplification is a good thing.
Seems there are more than a few people on this forum who use a 50/50 mix of the Ws, but as you suggested, a 50/50 combo fund would just cannibalize the Ws.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
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Charles Joseph
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Charles Joseph »

They're a good combo but others have suggested 50/50 Wellesley/Balanced Index Fund.
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Elysium
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Elysium »

They seem to do a good job beyond what's explained by the AA. Even their Global Wellington and Wellesley pairs have done well. Some good bond management is also going one suspects.

The only issue is that you lose control over the stock and bond portion to draw from separately if you are in decumulation. Most people would like these balanced funds in that phase. It'll be interesting to hear from those who are in that stage who may have used these funds for longer periods.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by ClaycordJCA »

This topic is now in the Investing - Theory, News & General forum.
rkhusky
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by rkhusky »

Because there’s not much difference between 50/50 and 60/40 or 40/60?

There’s also no 50/50 LifeStrategy fund.
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Charles Joseph
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Charles Joseph »

rkhusky wrote: Fri May 10, 2024 6:36 am Because there’s not much difference between 50/50 and 60/40 or 40/60?

There’s also no 50/50 LifeStrategy fund.
Good point. At least 50/50 Wellington/Balanced Index would keep one somewhat closer to the market risk. And it would serve a purpose for those seeking income (dividend arguments aside). But you are correct. With 40/60 and 60/40 LifeStrategy options, there's really no need for a 50/50 LS option.
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AlwaysLearningMore
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by AlwaysLearningMore »

Charles Joseph wrote: Fri May 10, 2024 11:18 am
rkhusky wrote: Fri May 10, 2024 6:36 am Because there’s not much difference between 50/50 and 60/40 or 40/60?

There’s also no 50/50 LifeStrategy fund.
Good point. At least 50/50 Wellington/Balanced Index would keep one somewhat closer to the market risk. And it would serve a purpose for those seeking income (dividend arguments aside). But you are correct. With 40/60 and 60/40 LifeStrategy options, there's really no need for a 50/50 LS option.
Plus, half each of the 40/60 and 60/40 LS funds would give a 50/50 allocation as well. Though without the income focus of the W's.
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Electron
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Electron »

I've also considered investing in both Wellesley Income and Wellington. I hold Wellesley in a number of different accounts and Wellington would provide some very useful diversification.

It might be worth mentioning that Daniel Pozen took over management of the equity portion of Wellington fund in July 2020. A number of changes have been made to the fund. The percentage invested in value stocks has been reduced in favor of a higher percentage in growth stocks. In checking the current holdings, I see that the five largest holdings are all members of the Magnificent Seven that we hear about all the time in the news. Pozen has also reduced the number of equity holdings with an emphasis on high-conviction security selection. The Price to Earnings ratio of the stock holdings is now closer to the S&P 500 benchmark.

Morningstar has moved the fund from the large-value category to the large-blend category.

It's not surprising that Wellington has outperformed Wellesley in recent years. However, there now appears to be a rotation towards value stocks and it can be seen in the recent performance of Wellesley.

Here is an interesting comparison chart showing the ratio of Vanguard Growth Index fund to Vanguard Value Index fund.

https://schrts.co/SyuzCKJR

Growth is outperforming when the ratio is rising. You can see the recent shift towards Value that started on February 9.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by AlwaysLearningMore »

Retirement is best when you have a lot to live on, and a lot to live for. * None of what I post is investment advice.* | FIRE'd July 2023
dcop
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by dcop »

I own both in pre-tax and I've been pleased with the total return over the last 16 years. Wellington is sitting on the largest unrealized gain currently that I can recall. Wouldn't want it in my taxable accounts. But to your point, it would make it simpler.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by AlwaysLearningMore »

dcop wrote: Tue May 14, 2024 4:52 pm I own both in pre-tax and I've been pleased with the total return over the last 16 years. Wellington is sitting on the largest unrealized gain currently that I can recall. Wouldn't want it in my taxable accounts. But to your point, it would make it simpler.
The typical Wellington December capital gains sure seem to be best suited for a tax-deferred account 👍

Combining the Wellington and Wellesley funds is something that Merriman discussed in an article on good funds for retirees.
https://www.paulmerriman.com/the-2-best ... #gsc.tab=0
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Tommy
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Tommy »

I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
dcop
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by dcop »

Tommy wrote: Tue May 14, 2024 11:28 pm I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
If you combine them like the OP is suggesting, you should see your above water on cost. At least that's the case for me in a similar time period. I never went red on total return (not even close) for either through the pandemic tank. I'm a huge fan of the W's.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by sycamore »

Tommy wrote: Tue May 14, 2024 11:28 pm I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
Ok I'll bite... How did you get a negative cost basis?
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Tommy »

sycamore wrote: Wed May 15, 2024 7:22 am
Tommy wrote: Tue May 14, 2024 11:28 pm I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
Ok I'll bite... How did you get a negative cost basis?
When market went down in 22 Wellesley was shown negative cost basis and became positive only couple weeks ago. More likely because of large CG before that decreased cost basis. Recently NAV was $55, lowest for 10 years.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by sycamore »

Tommy wrote: Fri May 17, 2024 7:40 pm
sycamore wrote: Wed May 15, 2024 7:22 am
Tommy wrote: Tue May 14, 2024 11:28 pm I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
Ok I'll bite... How did you get a negative cost basis?
When market went down in 22 Wellesley was shown negative cost basis and became positive only couple weeks ago. More likely because of large CG before that decreased cost basis. Recently NAV was $55, lowest for 10 years.
I think you're confusing the terms cost basis and capital gain/loss.

By definition cost basis is how much you paid for something (ok, you can also inherit shares that come with a cost basis).

Your net gain or loss is the current value of your shares minus your cost basis.

As the NAV goes down, your investment value goes down, as does your net gain (below zero it's a loss) but your cost basis stays the same.

A cap gains distribution is not a return of capital. If you paid $1000 and got a $50 cap gains distribution, your cost basis is still $1000.

(Some funds might issue a return of capital but I don't believe Wellesley did that.)

This is important to get right if you own shares in a taxable account so you can file accurate tax return when you sell shares.

Anyway I'm glad your Wellesley shares are worth more than what you paid for them ;)
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Charles Joseph
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Charles Joseph »

Tommy wrote: Tue May 14, 2024 11:28 pm I keep both. Together they give me 50/50. Funny thing is that I have Wellesley for 14 years and cost basis is negative :(
Do you not reinvest dividends and capital gains? I'd have to look again at the prospectus, but I believe the goal of the fund is to distribute as much of the fund's earnings as possible in the form of divs and capital gains.

Per portfolio visualizer, when you turn reinvestment of divs and capital gains off, VWINX since 1985 has only had a CAGR of 1.58%. The distributions have been nice, though. :happy

FYI with divs and cap gains reinvested since 2010, the CAGR is 6.46%. The nice thing about Wellesley is that you can collect the income and if you need to sell later you won't get hit with a lot of cap gains if it's in taxable. And if you're in a very low tax bracket and spending all the income, taxable is fine IMO if you are a person of modest means who won't get slammed by huge RMDs at some point down the road.

In some ways, for a person in the above situation who can handle modest movement of share price (2022 was a notable exception), Wellesley is almost like a savings account with about 33.5% of the dividends as Qualified Dividends and another big chunk as long-term capital gains that they'll also almost certainly pay zero tax on.
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AlwaysLearningMore
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by AlwaysLearningMore »

For the income/focused investor, turning off capital gains reinvestment and receiving dividends can be a good approach for Wellington and Wellesley. as a matter of fact, IIRC with Wellesley turning off capital gains distribution and collecting dividends did support a 4% withdrawal, at least at the time that information came out.
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by bertilak »

Charles Joseph wrote: Sat May 04, 2024 11:52 am
walescynwyd wrote: Sat Jul 22, 2023 10:09 pm After reading this article, I wonder why Wellington Management Company that manages Wellesley Fund and Wellington Fund isn't offer a 50/50 product, say "WellCore Fund". Thoughts?

By the way, ChatGPT, not me picked the name WellCore. Below is how I asked it :-)
Pick a name of a new fund, the name of which should be only two words and the first word's spelling should start with four letters "Well", whose portfolio consists only two funds of equal weight (50/50), one of which is Wellington Fund (65 equity / 35 bond), and the other of which is Wellesley Fund (35 equity / 65 bond).
This is a great idea.
Great idea unless you want to split your investments across a taxable account and a tax-advantaged account (IRA, 401(k)).
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Charles Joseph
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Re: WellCore for 50/50 of Wellesley/Wellington?

Post by Charles Joseph »

bertilak wrote: Sat May 18, 2024 11:55 am
Charles Joseph wrote: Sat May 04, 2024 11:52 am
walescynwyd wrote: Sat Jul 22, 2023 10:09 pm After reading this article, I wonder why Wellington Management Company that manages Wellesley Fund and Wellington Fund isn't offer a 50/50 product, say "WellCore Fund". Thoughts?

By the way, ChatGPT, not me picked the name WellCore. Below is how I asked it :-)
Pick a name of a new fund, the name of which should be only two words and the first word's spelling should start with four letters "Well", whose portfolio consists only two funds of equal weight (50/50), one of which is Wellington Fund (65 equity / 35 bond), and the other of which is Wellesley Fund (35 equity / 65 bond).
This is a great idea.
Great idea unless you want to split your investments across a taxable account and a tax-advantaged account (IRA, 401(k)).
Excellent point.
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