Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

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teelainen
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Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by teelainen » Thu Mar 14, 2019 2:59 pm

Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Which do you think is better for a 70 year old retiree hoping to enjoy a 20-30 year retirement?

Scenario:
20% of net worth is in taxable accounts.
80% of net worth is in tax-deferred accounts.

Thanks.
Last edited by teelainen on Thu Mar 14, 2019 3:17 pm, edited 1 time in total.

maj
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by maj » Thu Mar 14, 2019 3:10 pm

I like both funds, and own Wellington and LS GROWTH Fund.

I believe that LS MODERATE Growth fund is the better constructed fund for a hands-off long-term investor. It may slightly under-perform Wellington, but it offers far less capital gains tax liability.

peace

Grt2bOutdoors
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Location: New York

Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by Grt2bOutdoors » Thu Mar 14, 2019 3:10 pm

teelainen wrote:
Thu Mar 14, 2019 2:59 pm
Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Which do you think is better for a 70 year old retiree hoping to enjoy a 20-30 year retirement?

Thanks.
If you have 20-30x your annual spend accumulated, then either fund will be fine. How do you define "enjoy" and do you expect to leave a legacy behind for your estate? It's not the fund choice as much as it is your annual withdrawal rate and your expectations.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

Grt2bOutdoors
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by Grt2bOutdoors » Thu Mar 14, 2019 3:12 pm

maj wrote:
Thu Mar 14, 2019 3:10 pm
I like both funds, and own Wellington and LS GROWTH Fund.

I believe that LS MODERATE Growth fund is the better constructed fund for a hands-off long-term investor. It may slightly under-perform Wellington, but it offers far less capital gains tax liability.

peace
What is the relevance of a capital gains tax if the account is held in a tax deferred one, such as an IRA or 401k. The answer is none.
The question to the OP is it depends on what type of account will hold the funds in question. I agree, I would not hold Wellington in a taxable account if one's tax rate is high.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

dkturner
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by dkturner » Thu Mar 14, 2019 3:16 pm

Well, let’s take a look at the record. VSMGX began life on or about 9/30/1994. From that date a $10,000 investment would have grown to $58,650 by 3/13/2019. A $10,000 investment in VWELX (the investor share class of the Wellington Fund) would have grown to $90,302 for that same period. Will VWELX also outperform over the next 24.5 years? If you can answer that question you will know where to invest your money.

maj
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by maj » Thu Mar 14, 2019 3:27 pm

dk

do you happen to know the after-tax values?

dkturner
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by dkturner » Thu Mar 14, 2019 3:29 pm

maj wrote:
Thu Mar 14, 2019 3:27 pm
dk

do you happen to know the after-tax values?
No. I got the numbers from Morningstar’s chart comparing the gross returns of the two funds before taxes. I don’t understand how to interpret the post tax returns from the Morningstar chart, although it shows a higher value for the Wellington Fund.

azanon
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by azanon » Thu Mar 14, 2019 3:41 pm

teelainen wrote:
Thu Mar 14, 2019 2:59 pm
Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Which do you think is better for a 70 year old retiree hoping to enjoy a 20-30 year retirement?

Scenario:
20% of net worth is in taxable accounts.
80% of net worth is in tax-deferred accounts.

Thanks.
I'd recommend the Global version of Wellington. But if you insist between those two, then VSMGX because it's internationally diversified. Last I checked, Wellington was well under 20% international.

But i really would like to think you've accumulated more than enough and really only need Wellesley/Global Wellesley. They add on "income" fund for a reason, as a strong hint that, that's what it's for.

Grt2bOutdoors
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by Grt2bOutdoors » Thu Mar 14, 2019 3:57 pm

azanon wrote:
Thu Mar 14, 2019 3:41 pm
teelainen wrote:
Thu Mar 14, 2019 2:59 pm
Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Which do you think is better for a 70 year old retiree hoping to enjoy a 20-30 year retirement?

Scenario:
20% of net worth is in taxable accounts.
80% of net worth is in tax-deferred accounts.

Thanks.
I'd recommend the Global version of Wellington. But if you insist between those two, then VSMGX because it's internationally diversified. Last I checked, Wellington was well under 20% international.

But i really would like to think you've accumulated more than enough and really only need Wellesley/Global Wellesley. They add on "income" fund for a reason, as a strong hint that, that's what it's for.
Global Wellesley or Global Wellington - both are relatively new versions of the underlying domestic oriented Wellesley and Wellington. I would not hold any Lifestrategy fund as my sole retirement fund, Vanguard tinkers with the make-up of these funds based on "new" knowledge that I feel is less knowledge and more "trend". A few years ago, a 25% slice of the Lifestrategy funds were given to an outside manager (was it Dreyfus/Mellon) and invested in an asset allocation fund (read: market timing) with predictable mediocre results, the next move they made was to increase the international allocation to a 40% of equity slice and then to add international bonds to the mix. Time will tell if those moves add or detract from returns over time.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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Artsdoctor
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by Artsdoctor » Fri Mar 15, 2019 10:29 am

You can't compare the funds at all.

You'll need to decide how much international equity (and fixed income) you want to be exposed to. VSMGX has far more international and more emerging market exposure than VWENX so there's really no point in comparing those funds. I would take a look at what asset allocation you're looking at and then you'll be able to answer your question better.

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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by LadyGeek » Fri Mar 15, 2019 8:33 pm

This thread is now in the Personal Investments forum (investment help).

(Thanks to the member who reported the post. One of the reasons is "Wrong forum".)
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Re: Wellington Fund (VWENX) vs. LifeStrategy Moderate Growth Fund (VSMGX)

Post by averagedude » Fri Mar 15, 2019 8:54 pm

I personally prefer Life Strategy Moderate Growth over Wellington. It is more diversified and there is less risk. Wellington fund has had better returns in the past, but that doesn't necessarily mean it will have better returns in the future. There is a good chance that the Life Strategy fund will have better returns in the future, but it will depend how International stocks do. Many financial gurus predict that International stocks will outperform US markets over the next 10 years, including Vanguard. I must concede that anything that these people predict, you can take it as a grain of sand because nobody really knows. Here are my reasons for choosing the Life Strategy fund if i was 70 years old.
1. Less stock exposure. Life strategy has a 60/40 asset allocation. Wellington has a 67/33 asset allocation.
2. More diversified. Life strategy has 40% in International stock. Wellington has only 10%.
3. Life Strategy has over 8000 stocks in their portfolio. Wellington has 95.
4. Lower cost. Life Strategy has an expense ratio of 0.13%. Wellington has an expense ratio of 0.25%

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