Wellesley for bonds allocation?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Post Reply
Topic Author
orrsmills
Posts: 26
Joined: Mon Dec 20, 2021 2:35 pm

Wellesley for bonds allocation?

Post by orrsmills »

Hi, hope not a dumb question.

Could one consider their allocation in their 401K in Wellesley VWIAX as part of their bond allocation? I like using that fund as well as a little total bond fund for bonds.

Thx.
BrokerageZelda
Posts: 463
Joined: Sat Apr 10, 2021 10:39 am

Re: Wellesley for bonds allocation?

Post by BrokerageZelda »

Wellesley VWIAX is an actively managed balanced fund that contains both stock and bond holdings. It would be reasonable to count part of Wellesley (around 55-65%) as part of your bond holdings when calculating an overall asset mix, but you would not expect the fund as a whole to act like a bond fund.
mkc
Moderator
Posts: 3293
Joined: Wed Apr 17, 2013 2:59 pm

Re: Wellesley for bonds allocation?

Post by mkc »

We use a mix of VG Intermediate term bond index (VBILX) and Wellesley in our IRAs with the understanding that only a portion of Wellesley is in bonds. I would not consider it to be a 100% replacement for bonds.
sycamore
Posts: 6360
Joined: Tue May 08, 2018 12:06 pm

Re: Wellesley for bonds allocation?

Post by sycamore »

BrokerageZelda wrote: Sun Jan 16, 2022 12:44 pm Wellesley VWIAX is an actively managed balanced fund that contains both stock and bond holdings. It would be reasonable to count part of Wellesley (around 55-65%) as part of your bond holdings when calculating an overall asset mix, but you would not expect the fund as a whole to act like a bond fund.
^^ agree with this. Count the stocks as stocks, and bonds as bonds.
User avatar
retiredjg
Posts: 54082
Joined: Thu Jan 10, 2008 11:56 am

Re: Wellesley for bonds allocation?

Post by retiredjg »

orrsmills wrote: Sun Jan 16, 2022 12:31 pm Could one consider their allocation in their 401K in Wellesley VWIAX as part of their bond allocation? I like using that fund as well as a little total bond fund for bonds.
Of course...for about 60% of your Wellesley holding. You can't call the entire thing part of your bond allocation.
dbr
Posts: 46181
Joined: Sun Mar 04, 2007 8:50 am

Re: Wellesley for bonds allocation?

Post by dbr »

Just to summarize, Wellesley is absolutely not a bond fund, but it does hold bond assets and stock assets. The bond part is part of your bond allocation.

Another example of how balanced funds can be complicated and confusing.
User avatar
dwickenh
Posts: 2304
Joined: Sun Jan 04, 2015 8:45 pm
Location: Hills of Eastern Tennessee

Re: Wellesley for bonds allocation?

Post by dwickenh »

orrsmills wrote: Sun Jan 16, 2022 12:31 pm Hi, hope not a dumb question.

Could one consider their allocation in their 401K in Wellesley VWIAX as part of their bond allocation? I like using that fund as well as a little total bond fund for bonds.

Thx.
Yes you can, but remember that it is more risky than a normal fund due to 40% of it being in value large cap stocks. If you want
50% of your allocation in bonds, don't count all of Wellesley, just 60% of it for bonds. You could do worse for sure!!!

Dan
The market is the most efficient mechanism anywhere in the world for transferring wealth from impatient people to patient people.” | — Warren Buffett
tibbitts
Posts: 23726
Joined: Tue Feb 27, 2007 5:50 pm

Re: Wellesley for bonds allocation?

Post by tibbitts »

orrsmills wrote: Sun Jan 16, 2022 12:31 pm Hi, hope not a dumb question.

Could one consider their allocation in their 401K in Wellesley VWIAX as part of their bond allocation? I like using that fund as well as a little total bond fund for bonds.

Thx.
No, absolutely not. Only a portion of Wellesley can be counted as bonds, but you knew that when you asked.
Post Reply