Wellington fund
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Wellington fund
Someone here pointed out the superior performance of Wellington fund during 2000-2021 with a 4% WR. I then did a backtest and was quite taken aback and how incredible this fund has been:
2000-2021, 750K to start, 30K/yr WR (4%)
Final balances:
** Portfolio 1 (my current taxable AA): $1.5M [35% US Large, 34% US Small, 21% International, 10% Total Bond]
** Portfolio 2 (Wellington): $2.06M [100% Wellington VWELX]
** Portfolio 3 (standard 60/40): $759K [60% US Large, 40% Total Bond]
https://tinyurl.com/my4m2h7z
If you look at the graph it looks like Wellington really TOOK OFF like a rocketship post 2008... why is that exactly? Someone said it was due to a rally in bonds from 2000 but that makes no sense as a 60/40 portfolio did VERY poorly (the worst out of the 3 portfolios I listed).
2000-2021, 750K to start, 30K/yr WR (4%)
Final balances:
** Portfolio 1 (my current taxable AA): $1.5M [35% US Large, 34% US Small, 21% International, 10% Total Bond]
** Portfolio 2 (Wellington): $2.06M [100% Wellington VWELX]
** Portfolio 3 (standard 60/40): $759K [60% US Large, 40% Total Bond]
https://tinyurl.com/my4m2h7z
If you look at the graph it looks like Wellington really TOOK OFF like a rocketship post 2008... why is that exactly? Someone said it was due to a rally in bonds from 2000 but that makes no sense as a 60/40 portfolio did VERY poorly (the worst out of the 3 portfolios I listed).
- arcticpineapplecorp.
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Re: Wellington fund
one guess besides the bond performance relative to stock peformance the first 10 years, is the lack of foreign holdings which didn't help and probably hurt over the last 20 years. only 7% (https://investor.vanguard.com/mutual-fu ... olio/vwelx) international holdings in wellington vs. 20% in your more diversified portfolio.
Also, I think the withdrawals had something to do with it. While wellington still beat the more diversified portfolio without withdrawals, the differences were not AS stark:
https://www.portfoliovisualizer.com/bac ... ion8_2=100
just guesses of course.
Also, I think the withdrawals had something to do with it. While wellington still beat the more diversified portfolio without withdrawals, the differences were not AS stark:
https://www.portfoliovisualizer.com/bac ... ion8_2=100
just guesses of course.
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Re: Wellington fund
If you start 2 years later (2002-2021), portfolio 1 wins and 60/40 does much better relatively to the others two, so there is some sensitivity to the first two years of the period.
Compared to 60/40:
- Wellington's heavy tilt to value / dividend stocks helped in the 'lost decade'.
- Your (Portf 1) tilts towards small cap, 90% stocks, intl. helped in this time period.
Turning on annual rebalancing helps the 60/40 a bit. Wellington does some rebalancing, I would think ...
Compared to 60/40:
- Wellington's heavy tilt to value / dividend stocks helped in the 'lost decade'.
- Your (Portf 1) tilts towards small cap, 90% stocks, intl. helped in this time period.
Turning on annual rebalancing helps the 60/40 a bit. Wellington does some rebalancing, I would think ...
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Re: Wellington fund
In fact, starting in 2000 is probably the best possible starting date for Wellington as it is just starting a period of ~ three years of material over-performance relative to 70/30 - which steers you head-on into a sequence-of-return issue ...
For most periods Wellington and 70/30 perform quite similar ...
https://www.portfoliovisualizer.com/bac ... ion8_2=100
(70/30 may be better comparison point).
For most periods Wellington and 70/30 perform quite similar ...
https://www.portfoliovisualizer.com/bac ... ion8_2=100
(70/30 may be better comparison point).
Re: Wellington fund
Wellington also beat LifeStrategy Moderate Growth (VSMGX) and even the more aggressive LS Growth (VASGX) funds in the last 10 years.
Last edited by etfan on Tue Aug 03, 2021 8:47 pm, edited 1 time in total.
- nisiprius
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Re: Wellington fund
1) The impression that it "took off like a rocketship post 2008" is an artifact of using a linear scale instead of a logarithmic scale. Change to a log scale and the three lines become almost parallel.
2) Your portfolio is only 89% stocks. Wellington is 65% stocks, which is not a lot more than 60/40 but enough more to make the comparison a little sloppy.
3) You chose "no rebalancing." I don't want to go down that rabbit hole, but Vanguard's balanced funds rebalance very frequently, so I decided to use "monthly."
4) Removing your portfolio because of the huge difference in stock allocation, and boosting the 60/40 portfolio to 65/35 to match Wellington, and changing to monthly rebalancing, and plotting on a log axis...
...and starting in October, 2007...
5) Whatever the difference is can be attributed to Wellington's performance pre-2007.
That doesn't answer your question and you naturally ought to wonder if I intentionally tinkered to make Wellington look bad... but I think it underlines that the situation is complicated.
Source
2) Your portfolio is only 89% stocks. Wellington is 65% stocks, which is not a lot more than 60/40 but enough more to make the comparison a little sloppy.
3) You chose "no rebalancing." I don't want to go down that rabbit hole, but Vanguard's balanced funds rebalance very frequently, so I decided to use "monthly."
4) Removing your portfolio because of the huge difference in stock allocation, and boosting the 60/40 portfolio to 65/35 to match Wellington, and changing to monthly rebalancing, and plotting on a log axis...
...and starting in October, 2007...
5) Whatever the difference is can be attributed to Wellington's performance pre-2007.
That doesn't answer your question and you naturally ought to wonder if I intentionally tinkered to make Wellington look bad... but I think it underlines that the situation is complicated.
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Re: Wellington fund
There was a rotation into value during the 2000 dot com bubble burst. I don’t know why Wellington did so well. It’s like they had a crystal ball. But my bet is that Wellington’s blue chip portfolio with a value tilt was the magic formula.
Re: Wellington fund
There's nothing magical about Wellington, but for an all-in-one 60/40-ish fund it's a good choice. So are Vanguard Balanced, Vanguard LifeStrategy Moderate Growth, and Vanguard STAR. You could do a lot worse than any of those.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
Since 2009 (the start of the new long term bull market) 65/35 Total Stock/Total Bond has nudged out Wellington.
I agree with Gary though, those are all good balanced funds. I probably prefer LifeStrategy Growth LifeStrategy Moderate Growth of those listed because it's indexed and a global portfolio.
I agree with Gary though, those are all good balanced funds. I probably prefer LifeStrategy Growth LifeStrategy Moderate Growth of those listed because it's indexed and a global portfolio.
Last edited by DB2 on Thu Aug 05, 2021 4:55 pm, edited 2 times in total.
Re: Wellington fund
Did you mean LifeStrategy Moderate Growth (VSMGX)? LifeStrategy Growth (VASGX) is considerably more aggressive, with much larger STDEV and drawdowns.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
Re: Wellington fund
Not to digress, but I had a thought ...
It seems that more than a few Bogleheads like to have about 20% in non-US equities. Wellington falls well short of that. So I thought I'd try a little experiment, backtesting a 50/50 mix if VSMGX (Vanguard LifeStrategy Moderate Growth) and VBINX (Vanguard Balanced) against a 50/50 mix of VWELX and VGSTX (Vanguard STAR). Both of these combos result in approximately 20% non-US equities and an overall AA of approximate 60/40. In backtesting, they both produce about the same STDEV and drawdowns, but CAGR has been more than 1% better for the VWELX/VGSTX combo. Of course we can't know if this will continue in the future, but the results to date are impressive.
https://www.portfoliovisualizer.com/bac ... tion4_2=50
Edit:
Just for the heck of it, I added a BH 3-fund VTSMX/VGTSX/VBMFX to the PV backtest:
https://www.portfoliovisualizer.com/bac ... tion7_3=37
It seems that more than a few Bogleheads like to have about 20% in non-US equities. Wellington falls well short of that. So I thought I'd try a little experiment, backtesting a 50/50 mix if VSMGX (Vanguard LifeStrategy Moderate Growth) and VBINX (Vanguard Balanced) against a 50/50 mix of VWELX and VGSTX (Vanguard STAR). Both of these combos result in approximately 20% non-US equities and an overall AA of approximate 60/40. In backtesting, they both produce about the same STDEV and drawdowns, but CAGR has been more than 1% better for the VWELX/VGSTX combo. Of course we can't know if this will continue in the future, but the results to date are impressive.
https://www.portfoliovisualizer.com/bac ... tion4_2=50
Edit:
Just for the heck of it, I added a BH 3-fund VTSMX/VGTSX/VBMFX to the PV backtest:
https://www.portfoliovisualizer.com/bac ... tion7_3=37
Last edited by GaryA505 on Fri Aug 06, 2021 12:12 pm, edited 1 time in total.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
Keep in my that LifeStrategy didn't become an all-index fund until late 2011. The international allocations have also increased since that time Intentional bonds were introduced in 2013. So backtesting it too far out is trickier. With that said, anything with a heavier international exposure has generally not done as well since 1995 largely because of how strong the U.S. market has performed since 2009.
https://www.bogleheads.org/wiki/Vanguar ... tegy_Funds
https://www.bogleheads.org/wiki/Vanguar ... tegy_Funds
Re: Wellington fund
For 60/40, you might try using Vanguard Balanced Index Fund (VBIAX) as a benchmark. It returned 10.57% annualized in the past 10 years, while Wellington (VWELX and VWENX) beat it by only a little bit (at 10.78% and 10.87%).stocknoob4111 wrote: ↑Tue Aug 03, 2021 7:47 pm ** Portfolio 2 (Wellington): $2.06M [100% Wellington VWELX]
** Portfolio 3 (standard 60/40): $759K [60% US Large, 40% Total Bond]
Not exactly surprising, considering that we should expect 65/35 to beat 60/40, at least by a bit, during a massive bull run.
I agree with the above. Wellington is a fine fund, but for a balanced fund in a taxable account, I prefer VBIAX, and that's what I'm holding there (I don't use Tax-Managed Balanced, a 50/50 fund, because I'm in a low tax bracket).
Strategic Macro Senior (top 1%, 2019 Bogleheads Contest)
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Re: Wellington fund
And still is the magic sauce. It’s blue chip companies trading at attractive prices with wide moats and dividend growth. Essentially it’s the quality factor.Johnathon Livingston wrote: ↑Wed Aug 04, 2021 3:49 pm There was a rotation into value during the 2000 dot com bubble burst. I don’t know why Wellington did so well. It’s like they had a crystal ball. But my bet is that Wellington’s blue chip portfolio with a value tilt was the magic formula.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
- tennisplyr
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Re: Wellington fund
Have held Wellington for decades…no complaints.
“Those who move forward with a happy spirit will find that things always work out.” -Retired 13 years 😀
Re: Wellington fund
I don't see the "magic sauce" in the results of Wellington vs. its own benchmarks, or even in the recent (up to a decade or so at least) performance of arguably more "quality" focused Vanguard options (Dividend Appreciation, for example) vs. broader index offerings. I owned Wellington for much of the past decade, and it's been okay, but I've moved my traditional bond holdings (such as the bond portion of Wellington) to TIAA, and therefore Wellington wasn't a fit any longer.Grt2bOutdoors wrote: ↑Sat Aug 07, 2021 7:26 amAnd still is the magic sauce. It’s blue chip companies trading at attractive prices with wide moats and dividend growth. Essentially it’s the quality factor.Johnathon Livingston wrote: ↑Wed Aug 04, 2021 3:49 pm There was a rotation into value during the 2000 dot com bubble burst. I don’t know why Wellington did so well. It’s like they had a crystal ball. But my bet is that Wellington’s blue chip portfolio with a value tilt was the magic formula.
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Re: Wellington fund
Wellington has the basic problem of all active funds. John C. Bogle has a rather long chapter in Clash of the Cultures: Investment vs. Speculation entitled "The Rise, the Fall, and the Renaissance of the Wellington Fund: A Case Study--Investment Wins, Speculation Loses."
Everyone considering Wellington ought to read it.
According to Bogle, Wellington's history falls into three phases: a "rise" from 1929-1966; a "fall" from 1966-1978; and a "renaissance" from 1978 to the date of the book, 2012.
The question you need to ask yourself is: if you had been invested in the fund in 1966, a) would you have been aware of the change in its management philosophy and its strategy, and, more important, b) would you have correctly judged that it was a bad change and acted on it?
It's just as likely that you would have welcomed it, as a modernization of a stodgy old fund.
If you are investing in an active fund, you cannot escape the duty of paying attention to its management and judging whether their philosophy aligns with yours.
In this regard, and I am saying nothing against the fund or its new management, it may be relevant that the fund's current managers only began their tenure in 2017 and 2019. Do you have any idea whether the current managers are imbued with the philosophy of the previous managers... whether they are managing it "the same way" or "a new way?"
I don't. And I've never had any idea how to do that. I don't follow fund managers. I don't have a paid subscription to Morningstar so I don't know what Morningstar's analysts have to say about the fund managers. I don't know if I'd believe it if I did.
Actively managed funds are just more or less a pig in a poke, and given the alternative of index funds, I don't see the appeal of them.
Everyone considering Wellington ought to read it.
According to Bogle, Wellington's history falls into three phases: a "rise" from 1929-1966; a "fall" from 1966-1978; and a "renaissance" from 1978 to the date of the book, 2012.
The question you need to ask yourself is: if you had been invested in the fund in 1966, a) would you have been aware of the change in its management philosophy and its strategy, and, more important, b) would you have correctly judged that it was a bad change and acted on it?
It's just as likely that you would have welcomed it, as a modernization of a stodgy old fund.
If you are investing in an active fund, you cannot escape the duty of paying attention to its management and judging whether their philosophy aligns with yours.
In this regard, and I am saying nothing against the fund or its new management, it may be relevant that the fund's current managers only began their tenure in 2017 and 2019. Do you have any idea whether the current managers are imbued with the philosophy of the previous managers... whether they are managing it "the same way" or "a new way?"
I don't. And I've never had any idea how to do that. I don't follow fund managers. I don't have a paid subscription to Morningstar so I don't know what Morningstar's analysts have to say about the fund managers. I don't know if I'd believe it if I did.
Actively managed funds are just more or less a pig in a poke, and given the alternative of index funds, I don't see the appeal of them.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
Re: Wellington fund
I'd love to see a graph of Wellington vs 60/40 since 1929, to cover the complete history.nisiprius wrote: ↑Sat Aug 07, 2021 1:38 pm Wellington has the basic problem of all active funds. John C. Bogle has a rather long chapter in Clash of the Cultures: Investment vs. Speculation entitled "The Rise, the Fall, and the Renaissance of the Wellington Fund: A Case Study--Investment Wins, Speculation Loses."
Everyone considering Wellington ought to read it.
According to Bogle, Wellington's history falls into three phases: a "rise" from 1929-1966; a "fall" from 1966-1978; and a "renaissance" from 1978 to the date of the book, 2012.
The question you need to ask yourself is: if you had been invested in the fund in 1966, a) would you have been aware of the change in its management philosophy and its strategy, and, more important, b) would you have correctly judged that it was a bad change and acted on it?
It's just as likely that you would have welcomed it, as a modernization of a stodgy old fund.
If you are investing in an active fund, you cannot escape the duty of paying attention to its management and judging whether their philosophy aligns with yours.
In this regard, and I am saying nothing against the fund or its new management, it may be relevant that the fund's current managers only began their tenure in 2017 and 2019. Do you have any idea whether the current managers are imbued with the philosophy of the previous managers... whether they are managing it "the same way" or "a new way?"
I don't. And I've never had any idea how to do that. I don't follow fund managers. I don't have a paid subscription to Morningstar so I don't know what Morningstar's analysts have to say about the fund managers. I don't know if I'd believe it if I did.
Actively managed funds are just more or less a pig in a poke, and given the alternative of index funds, I don't see the appeal of them.
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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Re: Wellington fund
I own Wellington in my Roth - it’s done okay, definitely not a shoot the lights out fund (have other funds that do that or at least they say they say they aim for it). I look at the portfolio holdings on the equity side - it’s large value-y holdings that were/are out of favor but when the market recognizes the value the fund either continues to hold it or divests if it no longer fits with strategy of the fund.tibbitts wrote: ↑Sat Aug 07, 2021 8:31 amI don't see the "magic sauce" in the results of Wellington vs. its own benchmarks, or even in the recent (up to a decade or so at least) performance of arguably more "quality" focused Vanguard options (Dividend Appreciation, for example) vs. broader index offerings. I owned Wellington for much of the past decade, and it's been okay, but I've moved my traditional bond holdings (such as the bond portion of Wellington) to TIAA, and therefore Wellington wasn't a fit any longer.Grt2bOutdoors wrote: ↑Sat Aug 07, 2021 7:26 amAnd still is the magic sauce. It’s blue chip companies trading at attractive prices with wide moats and dividend growth. Essentially it’s the quality factor.Johnathon Livingston wrote: ↑Wed Aug 04, 2021 3:49 pm There was a rotation into value during the 2000 dot com bubble burst. I don’t know why Wellington did so well. It’s like they had a crystal ball. But my bet is that Wellington’s blue chip portfolio with a value tilt was the magic formula.
Someone asked above asked if the new managers follow the same strategy of the prior manager who retired and I’d say yes - Wellington Management Co. has a deep bench of professionals who support the manager of the Wellington fund, they know what the mandate of the funds strategy is and I’m sure Vanguard is in touch with its sub advisor long before any transition occurs on the fund itself. I believe one has to ask is there a difference between getting your replacement in-house from the same team of people who’ve worked on a particular project or strategy their entire career or actually going outside to hire someone fresh, I’d say yes there is and I’d be more concerned about the latter where the new person is a real unknown.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Wellington fund
I really believe people would have said (and probably did say) exactly the same regarding strategy and management continuation about Lincoln Capital and U.S. Growth (well, not the value tilt obviously, but the consistent management philosophy, Vanguard's oversight, etc.) And yet it still ran off the rails, much more recently than Wellington did.Grt2bOutdoors wrote: ↑Sat Aug 07, 2021 7:58 pm I own Wellington in my Roth - it’s done okay, definitely not a shoot the lights out fund (have other funds that do that or at least they say they say they aim for it). I look at the portfolio holdings on the equity side - it’s large value-y holdings that were/are out of favor but when the market recognizes the value the fund either continues to hold it or divests if it no longer fits with strategy of the fund.
Someone asked above asked if the new managers follow the same strategy of the prior manager who retired and I’d say yes - Wellington Management Co. has a deep bench of professionals who support the manager of the Wellington fund, they know what the mandate of the funds strategy is and I’m sure Vanguard is in touch with its sub advisor long before any transition occurs on the fund itself. I believe one has to ask is there a difference between getting your replacement in-house from the same team of people who’ve worked on a particular project or strategy their entire career or actually going outside to hire someone fresh, I’d say yes there is and I’d be more concerned about the latter where the new person is a real unknown.
Re: Wellington fund
I'm looking at it now. Although the style boxes still say it's a value fund, I'm not sure that's true anymore. Using Vanguard's compare tool, I see that its equity holdings have price/earnings and price/book numbers that look more like Total Stock than any value fund. Also, the top ten stock holdings have 6 in common with Total Stock, as well as with Growth Index, and fewer (3) in common with Equity Income or High Dividend Yield.Grt2bOutdoors wrote: ↑Sat Aug 07, 2021 7:58 pm I look at the portfolio holdings on the equity side - it’s large value-y holdings that were/are out of favor
So Wellington's equity holdings look more like "Large-cap Blend" to me.
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Re: Wellington fund
Since you are performance chasing an active fund, a combination for Fidelity and Dod&Cox has 2.5 times the returns of Wellington will lower volatility going back 34 yearsHermanTheGerman wrote: ↑Tue Aug 03, 2021 8:35 pm In fact, starting in 2000 is probably the best possible starting date for Wellington as it is just starting a period of ~ three years of material over-performance relative to 70/30 - which steers you head-on into a sequence-of-return issue ...
For most periods Wellington and 70/30 perform quite similar ...
https://www.portfoliovisualizer.com/bac ... ion8_2=100
(70/30 may be better comparison point).
https://www.portfoliovisualizer.com/bac ... ion12_1=65
- jeffyscott
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Re: Wellington fund
Actually, I think you are comparing 65/35 to 60/40.GaryA505 wrote: ↑Fri Aug 06, 2021 11:45 am Not to digress, but I had a thought ...
It seems that more than a few Bogleheads like to have about 20% in non-US equities. Wellington falls well short of that. So I thought I'd try a little experiment, backtesting a 50/50 mix if VSMGX (Vanguard LifeStrategy Moderate Growth) and VBINX (Vanguard Balanced) against a 50/50 mix of VWELX and VGSTX (Vanguard STAR). Both of these combos result in approximately 20% non-US equities and an overall AA of approximate 60/40. In backtesting, they both produce about the same STDEV and drawdowns, but CAGR has been more than 1% better for the VWELX/VGSTX combo. Of course we can't know if this will continue in the future, but the results to date are impressive.
Vanguard Star's "investment strategy" says: The fund follows a balanced investment approach by placing 60% to 70% of its assets in common stocks
So the mid-point for both it and Wellington is 65% stocks vs. 60% for balanced index and LifeStrategy Moderate.
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Re: Wellington fund
Back-testing funds and picking the outperforming one - best way to undersized returns. In most cases, you'd be better off picking the worst performing one give the same risk level.
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Re: Wellington fund
For this 90-year period, it looks like a wash.FactualFran wrote: ↑Sun Aug 08, 2021 1:42 pmThe following does not cover the complete history because it uses the annual returns.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
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Re: Wellington fund
I don't know who the principals are , but the primary principle is low cost, not necessarily fund manager avoidance, imo.
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Re: Wellington fund
Let's be real here, true investors look for opportunities where ever they can find them. This forum says it adheres to the principles of Jack Bogle and Vanguard, and for the most part those who post on here do, but a good percentage of them also hold actively managed Primecap, Capital Opportunity, Dividend Growth, the two W's and let's not forget the other two W's - Windsor and Windsor II, Equity Income and then we have outside active managers like Dodge and Cox and Fidelity. I myself hold, aghast! individual equities, Wellington and a few actively managed Fidelity funds, so what? My point is simple, while there is no perfect investment for all, there may be a perfect one just for you and no matter what you wind up investing in, so long as it meets your criteria and you can attain your end goal, what does it matter?Tommy wrote: ↑Mon Aug 09, 2021 1:57 pm Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Re: Wellington fund
You forgot VGSTX (Vanguard STAR)Grt2bOutdoors wrote: ↑Mon Aug 09, 2021 2:09 pmLet's be real here, true investors look for opportunities where ever they can find them. This forum says it adheres to the principles of Jack Bogle and Vanguard, and for the most part those who post on here do, but a good percentage of them also hold actively managed Primecap, Capital Opportunity, Dividend Growth, the two W's and let's not forget the other two W's - Windsor and Windsor II, Equity Income and then we have outside active managers like Dodge and Cox and Fidelity. I myself hold, aghast! individual equities, Wellington and a few actively managed Fidelity funds, so what? My point is simple, while there is no perfect investment for all, there may be a perfect one just for you and no matter what you wind up investing in, so long as it meets your criteria and you can attain your end goal, what does it matter?Tommy wrote: ↑Mon Aug 09, 2021 1:57 pm Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
I like STAR! I think it one of the best and in the same time one of the most underappreciated funds.GaryA505 wrote: ↑Mon Aug 09, 2021 2:19 pmYou forgot VGSTX (Vanguard STAR)Grt2bOutdoors wrote: ↑Mon Aug 09, 2021 2:09 pmLet's be real here, true investors look for opportunities where ever they can find them. This forum says it adheres to the principles of Jack Bogle and Vanguard, and for the most part those who post on here do, but a good percentage of them also hold actively managed Primecap, Capital Opportunity, Dividend Growth, the two W's and let's not forget the other two W's - Windsor and Windsor II, Equity Income and then we have outside active managers like Dodge and Cox and Fidelity. I myself hold, aghast! individual equities, Wellington and a few actively managed Fidelity funds, so what? My point is simple, while there is no perfect investment for all, there may be a perfect one just for you and no matter what you wind up investing in, so long as it meets your criteria and you can attain your end goal, what does it matter?Tommy wrote: ↑Mon Aug 09, 2021 1:57 pm Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
Re: Wellington fund
Seems like a 50/50 combo of Wellington and STAR might work nicely in tax-advantaged account, for people who like low-cost managed funds and approximately 20% (of equity) ex-US exposure.Tommy wrote: ↑Mon Aug 09, 2021 2:56 pmI like STAR! I think it one of the best and in the same time one of the most underappreciated funds.GaryA505 wrote: ↑Mon Aug 09, 2021 2:19 pmYou forgot VGSTX (Vanguard STAR)Grt2bOutdoors wrote: ↑Mon Aug 09, 2021 2:09 pmLet's be real here, true investors look for opportunities where ever they can find them. This forum says it adheres to the principles of Jack Bogle and Vanguard, and for the most part those who post on here do, but a good percentage of them also hold actively managed Primecap, Capital Opportunity, Dividend Growth, the two W's and let's not forget the other two W's - Windsor and Windsor II, Equity Income and then we have outside active managers like Dodge and Cox and Fidelity. I myself hold, aghast! individual equities, Wellington and a few actively managed Fidelity funds, so what? My point is simple, while there is no perfect investment for all, there may be a perfect one just for you and no matter what you wind up investing in, so long as it meets your criteria and you can attain your end goal, what does it matter?Tommy wrote: ↑Mon Aug 09, 2021 1:57 pm Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
I hate picking funds based upon past performance.
If the secret sauce is the manager, then I want no part of it. Managers come and go.
Re: Wellington fund
Wellington doesn't have any secret sauce and never did, and is not run by a rock star manager and never was. It's multiple managers have "come and gone" for 90 years, yet it still keeps plugging along, often beating Vanguard Balanced Index, and sometimes not. Wellington's record compared to the LifeStrategy funds is more due to it's composition, which differs significantly from the LifeStrategy funds. To start with, LifeStrategy funds have roughly 40% of their equity in international, while Wellington has only about 10% or so. As we have seen, that makes a huge difference. But that's the past, and nobody knows what will happen in the future.
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
Re: Wellington fund
Agree. I'm mystified by Wellington's weightings relative to market weightings. Looks like someone there thinks they know better.
I'm mystified, too, by this on VG Wellington's site:
"Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors. This is important because one or two holdings should not have a sizeable impact on the fund."
https://investor.vanguard.com/mutual-fu ... file/VWELX
Yet when I look at their holdings, I see 10 stocks that make up "26.10% of total net assets" and "39.40% of Equity." Holy cow! Is that not a contradiction of the "one or two holdings should not have a sizeable impact on the fund" statement?
Yeah, 10 is not "one or two," but I have trouble with 10 stocks (half in tech) making up a quarter of a portfolio and over a third of the equity part of a portfolio and calling that "broad diversification." How can the handful of trillion-dollar tech stocks take a dive and not take that fund down disproportionately?
To me it looks like Wellington has been performance-chasing. I guess that works for a while. We certainly saw that in the dot-com era.
Re: Wellington fund
Wellington has been outperforming Balanced Index (VBIAX) by a full point going back as far as I can on Portfolio Visualizer (2001) - https://www.portfoliovisualizer.com/bac ... ion2_2=100.namajones wrote: ↑Sat Oct 02, 2021 5:42 pmAgree. I'm mystified by Wellington's weightings relative to market weightings. Looks like someone there thinks they know better.
I'm mystified, too, by this on VG Wellington's site:
"Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors. This is important because one or two holdings should not have a sizeable impact on the fund."
https://investor.vanguard.com/mutual-fu ... file/VWELX
Yet when I look at their holdings, I see 10 stocks that make up "26.10% of total net assets" and "39.40% of Equity." Holy cow! Is that not a contradiction of the "one or two holdings should not have a sizeable impact on the fund" statement?
Yeah, 10 is not "one or two," but I have trouble with 10 stocks (half in tech) making up a quarter of a portfolio and over a third of the equity part of a portfolio and calling that "broad diversification." How can the handful of trillion-dollar tech stocks take a dive and not take that fund down disproportionately?
To me it looks like Wellington has been performance-chasing. I guess that works for a while. We certainly saw that in the dot-com era.
Wellington also outperformed compared to VBIAX after than dot-com crash.
The active management allows them to be pragmatic and not have a ton of holdings especially with a third of the fund in bonds. They have agility.
You can call it performance chasing, but they are actually getting results and not strictly abiding by some dogmatic ideology in the name of "Value" (whatever that can mean) that may have led to subpar results. The fund's performance has been doing exactly as expected for a very, very long time.
Re: Wellington fund
This is the only actively managed fund that really interests me. I’m impressed by its very long track record of steady performance in various market conditions. The above observation re its relatively narrow stock holdings (10 stocks comprising 39% of equity) is a valid criticism and gives me pause—although I don’t think this necessarily suggests performance chasing. I’m interested to see what others say about this.namajones wrote: ↑Sat Oct 02, 2021 5:42 pmAgree. I'm mystified by Wellington's weightings relative to market weightings. Looks like someone there thinks they know better.
I'm mystified, too, by this on VG Wellington's site:
"Another key attribute is broad diversification—the fund invests in stocks and bonds across all economic sectors. This is important because one or two holdings should not have a sizeable impact on the fund."
https://investor.vanguard.com/mutual-fu ... file/VWELX
Yet when I look at their holdings, I see 10 stocks that make up "26.10% of total net assets" and "39.40% of Equity." Holy cow! Is that not a contradiction of the "one or two holdings should not have a sizeable impact on the fund" statement?
Yeah, 10 is not "one or two," but I have trouble with 10 stocks (half in tech) making up a quarter of a portfolio and over a third of the equity part of a portfolio and calling that "broad diversification." How can the handful of trillion-dollar tech stocks take a dive and not take that fund down disproportionately?
To me it looks like Wellington has been performance-chasing. I guess that works for a while. We certainly saw that in the dot-com era.
Regards,
DangerDad
Re: Wellington fund
I sold all my Wellington a while ago, but it seems like when I last looked at the Vanguard website, Wellington was losing to its own benchmark over 3, 5 and 10 years. Are you looking at a longer-term record?DangerDad wrote: ↑Sat Oct 02, 2021 11:26 pm
This is the only actively managed fund that really interests me. I’m impressed by its very long track record of steady performance in various market conditions. The above observation re its relatively narrow stock holdings (10 stocks comprising 39% of equity) is a valid criticism and gives me pause—although I don’t think this necessarily suggests performance chasing. I’m interested to see what others say about this.
Regards,
DangerDad
Re: Wellington fund
I hear you about the track record, but I've learned to be cautious about track records built on the backs of stock picking by humans.DangerDad wrote: ↑Sat Oct 02, 2021 11:26 pm I’m impressed by its very long track record of steady performance in various market conditions. The above observation re its relatively narrow stock holdings (10 stocks comprising 39% of equity) is a valid criticism and gives me pause—although I don’t think this necessarily suggests performance chasing. I’m interested to see what others say about this.
Regards,
DangerDad
Wellington's concentration in a relatively few names is right there in black and white--and it seems utterly contradictory to their own claim to "broad diversification." The concentration in Wellington in so few stocks reminds me of some of the go-go funds of the late 90s. Not as bad, but the similarities are there.
You can hope that the managers have some secret sauce that will allow them to actively get out of the way of a crash in their tech-heavy holdings, but that's merely hope. Like all active managers, the folks behind Wellington apparently think they know something that others don't. Otherwise, wouldn't they just follow the indexing principle that made Vanguard famous?
Re: Wellington fund
Is there an equivalent to Wellington within Fidelity Funds? We need to roll my wifes 401k over and wanted to stay with fidelity. We also have Vanguard accounts.
Re: Wellington fund
There's no equivalent really - Wellington is actively managed so unless Wellington Management (which manages Wellington fund) is managing a fund at Fidelity, you'd have to settle for something merely resembling Wellington.
Fidelity Puritan (FPURX) is commonly suggested. Its 70/30 allocation is similar but it's focused on growth stocks whereas Wellington is value-focused.
Fidelity Balanced (FBALX) is another one to consider. Also 7030, and its stocks are more of a blend of growth & value.
Or pick on of Fidelity's Freedom Index funds that has a similar AA. But those funds follow a glide slope so the AA changes over time.
Here are some of previous BH threads on the subject: https://www.google.com/search?q=welling ... eheads.org
Re: Wellington fund
If you want Wellington and you're willing to pay the $75, you can always invest in VWELX at Fidelity. Investor shares only, unfortunately.
Re: Wellington fund
Thanks for the replies. Looks like we will roll over to VG.
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Re: Wellington fund
I you want to, you could buy Wellington admiral there and then, I think, transfer it in-kind to Fidelity. You would not be able to buy more (can buy only investor shares, with a fee as noted above), but there's no fee for selling.
Re: Wellington fund
Looking at Wellington thru the decline in the market. They seem to not have crashed with tech as some were thinking in prior posts last year. Just an observation. I'm trying to get my Trad. IRA shaped up. Would not use in taxable or probably not in roth IRA.
Re: Wellington fund
Using this along with a Vanguard target date fund (50/50) in the IRA. It is well run with low expenses for an actively managed fund. Turnover rate last year was 35%. Keep in mind Wellington's equity side under-performs whenever tech outperforms because of its conservative portfolio of stocks, and vice versa.
There is no free lunch.
Re: Wellington fund
Wellington has a weighted 20.5% in tech. So still gives you exposure somewhat.
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Re: Wellington fund
Grt2bOutdoors wrote: ↑Mon Aug 09, 2021 2:09 pmLet's be real here, true investors look for opportunities where ever they can find them. This forum says it adheres to the principles of Jack Bogle and Vanguard, and for the most part those who post on here do, but a good percentage of them also hold actively managed Primecap, Capital Opportunity, Dividend Growth, the two W's and let's not forget the other two W's - Windsor and Windsor II, Equity Income and then we have outside active managers like Dodge and Cox and Fidelity. I myself hold, aghast! individual equities, Wellington and a few actively managed Fidelity funds, so what? My point is simple, while there is no perfect investment for all, there may be a perfect one just for you and no matter what you wind up investing in, so long as it meets your criteria and you can attain your end goal, what does it matter?Tommy wrote: ↑Mon Aug 09, 2021 1:57 pm Every several months somebody starting topic about Wellington / Wellesley. Looks like one is trying to convince himself that despite WW are active managed funds(and hence contradict Bogleheads principals ) they are very good and it ok to have them in the portfolio.
“Vanguard has remained committed to active management and has even tolerated highly differentiated portfolios from its most skilled investors. The Advice Select portfolios are also akin to Vanguard Windsor (VWNDX) when John Neff ran it from 1964 to 1995.
In Neff's last decade, Vanguard Windsor held as few as 50 stocks, and its typical materials sector overweighting reached 20 percentage points versus the S&P 500. Granted, it underperformed in those 10 years, but its results over Neff’s tenure were outstanding. Bogle himself seems to have benefited, as regulatory filings showed Vanguard Windsor was his biggest personal fund holding more than two years after Neff stepped down.[8]
[8] In March 1998, 38.4% of Bogle’s personal $35.2 million portfolio was in index funds; the rest was active, including his biggest single holding: a $4.6 million stake in the stock strategy Vanguard Windsor. See Gould, C. 1998. “An Unusual Window into Vanguard.” New York Times.”
https://www.morningstar.com/articles/10 ... r-vanguard
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
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Re: Wellington fund
Wellington is over-rated. You can do better with Vanguard Utilities Index Fund.