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.
Wellesley for bonds allocation?
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Re: Wellesley for bonds allocation?
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.
Re: Wellesley for bonds allocation?
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.
Re: Wellesley for bonds allocation?
^^ agree with this. Count the stocks as stocks, and bonds as bonds.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.
Re: Wellesley for bonds allocation?
Of course...for about 60% of your Wellesley holding. You can't call the entire thing part of your bond allocation.
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Re: Wellesley for bonds allocation?
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.
Another example of how balanced funds can be complicated and confusing.
Re: Wellesley for bonds allocation?
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
Re: Wellesley for bonds allocation?
No, absolutely not. Only a portion of Wellesley can be counted as bonds, but you knew that when you asked.