Why is Global Wellington not popular here?

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Blue456
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Why is Global Wellington not popular here?

Post by Blue456 »

I am just curious why is Global Wellington getting so little love here?
The fund is fairly balanced:
- 65/35 allocation
- Value tilt
- Bond duration is 6.9 years
- 35% developed countries
- 2% emerging (avoids China it seems)
- ER 0.36%

Is it the international exposure, the management or the ER?
tibbitts
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Re: Why is Global Wellington not popular here?

Post by tibbitts »

Blue456 wrote: Tue Sep 29, 2020 8:42 am I am just curious why is Global Wellington getting so little love here?
The fund is fairly balanced:
- 65/35 allocation
- Value tilt
- Bond duration is 6.9 years
- 35% developed countries
- 2% emerging (avoids China it seems)
- ER 0.36%

Is it the international exposure, the management or the ER?
I think it's like with other funds where you feel you are paying the high ER needlessly on the portion of the fund you could get cheaper: the domestic part. It seems like the .36 might be sort of reasonable for the international component alone, but you're not paying the half or whatever that that you'd be wiling to pay on the domestic portion. Sometimes you see for example a bond fund-of-funds, and the expense ratio is like that for an active high-yield fund, but you've got treasury and GNMA funds in there and you're paying the high expense ratio for those too.

And then you have Bogleheads who aren't sold on international stocks, or the even bigger percentage not sold on international bonds.

Lastly, even among Bogleheads,any kind of hint at value hasn't been as popular lately, although I think that would play more heavily into the Wellesley version of this fund.
Last edited by tibbitts on Tue Sep 29, 2020 9:08 am, edited 2 times in total.
BalancedJCB19
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Re: Why is Global Wellington not popular here?

Post by BalancedJCB19 »

It's fairly new (I believe 2017 was when they brought it to the public) and although low cost it's still a managed fund. I'm not a fan of international stocks and definitely not a fan of international bonds, so Wellington would be a better choice for me. However, if I had the choice which I do, I'd stick with the plain vanilla Balanced Index Fund. The 90 plus year old Wellington has more than proved itself, it's the Alpha in John Bogle's book Stay the Course.
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Re: Why is Global Wellington not popular here?

Post by jebmke »

tibbitts wrote: Tue Sep 29, 2020 9:01 am I think it's like with other funds where you feel you are paying the high ER needlessly on the portion of the fund you could get cheaper: the domestic part. It seems like the .36 might be sort of reasonable for the international component alone, but you're not paying the half or whatever that that you'd be wiling to pay on the domestic portion. Sometimes you see for example a bond fund-of-funds, and the expense ratio is like that for an active high-yield fund, but you've got treasury and GNMA funds in there and you're paying the high expense ratio for those too.
Yes, that chews up as much as a quarter of the yield off the underlying bonds. ERs on bond holdings need to be <= 10bp IMO or you might as well just sit in T-Bills and earn nothing.
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Re: Why is Global Wellington not popular here?

Post by nisiprius »

Are you suggesting that it is popular somewhere? Where?

I'm just going to state what I think are the reasons. Briefly: a) very new (while Wellington is very old), and b) no aura from any direct connection with John C. Bogle, c) no obvious reason to be attracted to it apart from "Wellington" in the name.

a) "Staying the course" means just that. Global Wellington was introduced on 11/02/2017. If you were invested before then, investing in Global Wellington would mean changing from something else. Someone trying to stay the course should not be constantly shifting around in an effort to adopt the "latest and greatest."

b) This forum is centered on "Investing Advice Inspired by Jack Bogle." Bogle was pitbull-tenacious in his advocacy for index funds, by which he meant total market index funds. The most popular kind of portfolio is the three-fund portfolio, three index funds, advocated by Bogleheads' cofounder Taylor Larimore.

c) Wellington is an actively-managed fund, but John C. Bogle had a long personal connection with it. He used it as the centerpiece of a long and detailed chapter in "Clash of the Cultures," in which he refers to the "rise" (1929-1966), "fall" (1967-1978), and "resurrection" (1979-date). (He acknowledged that the "fall" took place on his watch, due to departing from principles of "investment rather than speculation.") Bogle said that he personally had a large holding in Wellington, but implied that he stuck with it because of a combination of tax considerations and sentiment, as well as good performance.

Some Bogleheads are probably aware of and influenced by the aura of Bogle's personal connection.

d) Wellington has a track record more than ninety years long. Global Wellington is so new that Morningstar's methodology does not yet allow them to give it a star rating. Star ratings have virtually no persistence or predictive ability but they are still interesting as good measures of past performance (adjusted for risk and measured relative to similar funds).

e) John C. Bogle was cool-to-lukewarm about international stock investing. I don't know if he's ever commented specifically on Global Wellington. It was introduced in late 2017, and Bogle's last book, Stay the Course, had a publication date of December 6, 2018; it discusses many of Vanguard's funds, with many mentions of Wellington, but does not mention Global Wellington. It seems very unlikely that Bogle would have criticized Wellington for failure to include enough international stocks, nor that he would have been enthusiastic about their inclusion in Global Wellington. (In contrast, he criticized the Total Bond Fund for being tied to an index that, in his opinion, included too much in government issues and not enough in corporates, so he wasn't afraid to criticize funds). So in my personal perception, the "Bogle aura" does not extend to include Global Wellington.

Some neutral observations:

f) The listed managers for Wellington are:

Wellington Management Company LLP
Michael E. Stack, since 2017.
Loren L. Moran, since 2017
Daniel J. Pozen, Senior Managing Director, since 2019.

For Global Wellington:

Wellington Management Company LLP
Nataliya Kofman, Managing Director, since 2017
Loren L. Moran, since 2017
Michael E. Stack, since 2017

Based on that overlap, calling it "Global Wellington" seems like more than empty branding, but I don't know how to judge to what extent is is managed in the same way.

Of course, in the world of active funds, you are supposed to care about the managers and changes in management, and since both "straight" Wellington and Global Wellington's managers only began in 2017, who knows if "straight" Wellington is still "what it was?"

g) Bogle's "Cost Matters Hypothesis" has been a powerful message for Bogleheads, some of whom arguably have taken it to too much of an extreme. In any case, because they are actively managed funds, Vanguard requires a $50,000 minimum investment for Admiral Shares. If we look at expenses, the expense ratios and the terms Morningstar chooses to describe them, and compare with the Vanguard Balanced Index fund:

$3,000 investment:
Vanguard Balanced Index Fund, VBIAX, 0.07%, "Low"
Wellington, VWELX, 0.25%, "Low"
Global Wellington, VGWLX, 0.46%, "Low"

$50,000:
Vanguard Balanced Index Fund, VBIAX, 0.07%, "Low"
Wellington, VWENX, 0.17%, "Low"
Global Wellington, VGWAX, 0.36%, "Low"
Last edited by nisiprius on Tue Sep 29, 2020 3:33 pm, edited 8 times in total.
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Robot Monster
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Re: Why is Global Wellington not popular here?

Post by Robot Monster »

Wellington also manages Vanguard International Core Stock Fund, but to me that is unappealing due to its high expense ratio (0.35% for Admiral) and its similar performance to VXUS. I would think the same issues I have with that fund would extend to Global Wellington.
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Re: Why is Global Wellington not popular here?

Post by tibbitts »

Robot Monster wrote: Tue Sep 29, 2020 10:48 am Wellington also manages Vanguard International Core Stock Fund, but to me that is unappealing due to its high expense ratio (0.35% for Admiral) and its similar performance to VXUS. I would think the same issues I have with that fund would extend to Global Wellington.
I did invest in International Core, partly because it was a new fund and I thought without baggage and a non-existent asset base, it might indeed be able to beat its benchmark. And Covid-19 seemed to provide an even better opportunity. As for expenses, it seemed likely they might fall over time as assets grew. Well, if they grew. Well, it wasn't the worst bet, but clearly hasn't paid off, so it's probably time to retreat back to Total International. It hasn't deviated that much, which is what I'd expected, it just didn't provide that little extra that I'd thought it might, at the time when it had the best opportunity to.
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Re: Why is Global Wellington not popular here?

Post by David Jay »

nisiprius wrote: Tue Sep 29, 2020 10:31 ama) "Staying the course" means just that. Global Wellington was introduced on 11/02/2017. If you were invested before then, investing in Global Wellington would mean changing from something else. Someone trying to stay the course should not be constantly shifting around in an effort to adopt the "latest and greatest."
This!

I am staying the course, which means not adopting random “stray dog” funds that come along, regardless of how cute and fuzzy they may be.
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Re: Why is Global Wellington not popular here?

Post by rich126 »

A lot of people here having gone away from international stocks and also don't do active funds.

Personally I don't care for mutual funds and rather do straight indexes or an ETF.
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UpperNwGuy
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Re: Why is Global Wellington not popular here?

Post by UpperNwGuy »

1. Too new.
2. Too expensive.
3. Too much international.
4. Actively managed.
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Re: Why is Global Wellington not popular here?

Post by lifeisinmirrors »

The regular Wellington fund already is allowed to hold international stocks, which make up about 1/5 of its stock holdings. I don't see any need for more than that.
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Re: Why is Global Wellington not popular here?

Post by Mike Scott »

I'm a fan of the Ws but other than being a new flavor, Global W seems a bit like the answer to a question no one asked. I suppose it emphasizes and reinforces Vanguard's advice on investing in international.
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Re: Why is Global Wellington not popular here?

Post by Al the Knife »

I can think of two rational reasons why I would hold Global Wellington:

1. Entertainment/education
2. I would be making a charitable contribution to active price discovery.

A third more speculative reason is that perhaps there is some obvious garbage being held by stock and bond indices that Global Wellington would be able to avoid.

I’m not being entirely dismissive of it, as I have considered putting a small amount of it into my tax-deferred space for the reasons stated above.
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Re: Why is Global Wellington not popular here?

Post by m@ver1ck »

I hold 150K in global Wellington. Mostly since I don’t want VTIAX. All my 'international' exposure is through Global Wellington and Wellington (which apparently also has 10% global exposure).
Last edited by m@ver1ck on Fri May 14, 2021 4:08 pm, edited 1 time in total.
secondopinion
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Re: Why is Global Wellington not popular here?

Post by secondopinion »

Blue456 wrote: Tue Sep 29, 2020 8:42 am I am just curious why is Global Wellington getting so little love here?
The fund is fairly balanced:
- 65/35 allocation
- Value tilt
- Bond duration is 6.9 years
- 35% developed countries
- 2% emerging (avoids China it seems)
- ER 0.36%

Is it the international exposure, the management or the ER?
I only have access to Wellesley and I do not have access to global fund variants. The expense ratio is not trivial. I am not against international.
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Re: Why is Global Wellington not popular here?

Post by GaryA505 »

Why would anyone buy Vanguard Global Wellington instead of Vanguard STAR, which has been around a while and has a proven track record?
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: Why is Global Wellington not popular here?

Post by Anon9001 »

Blue456 wrote: Tue Sep 29, 2020 8:42 am I am just curious why is Global Wellington getting so little love here?
The fund is fairly balanced:
- 65/35 allocation
- Value tilt
- Bond duration is 6.9 years
- 35% developed countries
- 2% emerging (avoids China it seems)
- ER 0.36%

Is it the international exposure, the management or the ER?
Very good ER for active management. Most of the benefits of passive over active is fees so it wouldn't hurt to go with this.
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Dave55
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Re: Why is Global Wellington not popular here?

Post by Dave55 »

I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
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DB2
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Re: Why is Global Wellington not popular here?

Post by DB2 »

I own some Global Wellington as I want some active management in my portfolio that is global and large cap value focused. Part of this is an inflation hedge for me. Wellington's guiding principles and track record speaks for itself.
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Re: Why is Global Wellington not popular here?

Post by Northern Flicker »

Blue456 wrote: Tue Sep 29, 2020 8:42 am I am just curious why is Global Wellington getting so little love here?
The fund is fairly balanced:
- 65/35 allocation
- Value tilt
- Bond duration is 6.9 years
- 35% developed countries
- 2% emerging (avoids China it seems)
- ER 0.36%

Is it the international exposure, the management or the ER?
It is a fairly new fund. If you want an actively managed balanced fund with global diversification, this fund or the Star Fund have low cost for active management. Active management in general is less popular than indexing here, so global Wellington is not as popular as some other choices.
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Re: Why is Global Wellington not popular here?

Post by GaryA505 »

To me, the obvious comparison here is between VSMGX (Vanguard LifeStrategy Moderate Growth), VGSTX (Vanguard STAR), and VGWAX (Vanguard Global Wellington).

VGWAX has a serious large cap value tilt. Maybe it will pay off, maybe it won't. It also has more ex-US stock than the other two.
VGSTX has a slight large cap growth tilt but appears to be closer in composition to VSMGX overall, than does VGWAX.

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Re: Why is Global Wellington not popular here?

Post by abuss368 »

Dave55 wrote: Fri May 14, 2021 1:16 pm I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
Dave -

I agree. A sign of a good manager is one who invests along side the investors. Dodge & Cox is another example of a good manager.

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Re: Why is Global Wellington not popular here?

Post by GaryA505 »

Dave55 wrote: Fri May 14, 2021 1:16 pm I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
I'm curious what are the category peers that it's beating by 1% - 5%?
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: Why is Global Wellington not popular here?

Post by dharrythomas »

We own a little to provide an active management to balance LifeStrategy, Target Retirement, and the TSP LifeCycle index based funds that hold most of our tax deferred $$. We’ve also got a small allocation to value and REIT.

Global Wellington is a little cheaper than STAR, with a larger allocation to international and a value tilt.
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Re: Why is Global Wellington not popular here?

Post by Dave55 »

GaryA505 wrote: Fri May 14, 2021 3:27 pm
Dave55 wrote: Fri May 14, 2021 1:16 pm I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
I'm curious what are the category peers that it's beating by 1% - 5%?
See below or go to Morningstar enter VGWAX in enter quotes, and from the Quote page of Vanguard Global Wellington go to the "Performance" tab, there is a row showing + or minus the "Category".
Here are the #'s:

2018: +3.55%
2019: +6.05%
2020: +1.33%
2021 YTD: 1.11%

Dave
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Re: Why is Global Wellington not popular here?

Post by GaryA505 »

Dave55 wrote: Fri May 14, 2021 4:09 pm
GaryA505 wrote: Fri May 14, 2021 3:27 pm
Dave55 wrote: Fri May 14, 2021 1:16 pm I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
I'm curious what are the category peers that it's beating by 1% - 5%?
See below or go to Morningstar enter VGWAX in enter quotes, and from the Quote page of Vanguard Global Wellington go to the "Performance" tab, there is a row showing + or minus the "Category".
Here are the #'s:

2018: +3.55%
2019: +6.05%
2020: +1.33%
2021 YTD: 1.11%

Dave
Thanks. I was hoping to be able to find some specific examples (funds). Since most funds in the category are probably awful, I'm not sure that's a useful metric.

I think a useful comparison here would be VSMGX (Vanguard Lifestrategy Moderate Growth). Since VGWAX is doing worse than that, I'm not sure why I would bother with it, unless I really wanted to place a bet on the value tilt.
https://www.portfoliovisualizer.com/bac ... ion2_2=100
Get most of it right and don't make any big mistakes. All else being equal, simpler is better. Simple is as simple does.
DB2
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Re: Why is Global Wellington not popular here?

Post by DB2 »

GaryA505 wrote: Fri May 14, 2021 4:15 pm
Dave55 wrote: Fri May 14, 2021 4:09 pm
GaryA505 wrote: Fri May 14, 2021 3:27 pm
Dave55 wrote: Fri May 14, 2021 1:16 pm I think it is an excellent fund, although I do not use it. The managers all have a stake in the fund, it has a low expense ratio (relative to most managed funds), and it's returns are beating it's category peers by 1%-5% in its short history. Wellington Management is an excellent money manager with over $1 Trillion ins assets, a lot of the money they manage is institutional.

Dave
I'm curious what are the category peers that it's beating by 1% - 5%?
See below or go to Morningstar enter VGWAX in enter quotes, and from the Quote page of Vanguard Global Wellington go to the "Performance" tab, there is a row showing + or minus the "Category".
Here are the #'s:

2018: +3.55%
2019: +6.05%
2020: +1.33%
2021 YTD: 1.11%

Dave
Thanks. I was hoping to be able to find some specific examples (funds). Since most funds in the category are probably awful, I'm not sure that's a useful metric.

I think a useful comparison here would be VSMGX (Vanguard Lifestrategy Moderate Growth). Since VGWAX is doing worse than that, I'm not sure why I would bother with it, unless I really wanted to place a bet on the value tilt.
https://www.portfoliovisualizer.com/bac ... ion2_2=100
Yes, I would say it's really whether or not you want to place a bet on global large value. Of course, Value got hit hard last year because of the Covid shutdown, but with the reopening and inflationary pressures, the fund has been performing well in its class again.

I do see the fund is holding about 5.5% in short term reserves which seems a bit high to me.
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Blue456
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Re: Why is Global Wellington not popular here?

Post by Blue456 »

DB2 wrote: Fri May 14, 2021 5:08 pm I do see the fund is holding about 5.5% in short term reserves which seems a bit high to me.
One could look at it as offsetting the duration of the bonds.
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Re: Why is Global Wellington not popular here?

Post by bog007 »

vbiax is much cheaper. then add a bit of international
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Re: Why is Global Wellington not popular here?

Post by GaryA505 »

bog007 wrote: Mon May 31, 2021 11:20 am vbiax is much cheaper. then add a bit of international
Or to make it even simpler, just buy VSMGX (Life Strategy Moderate Growth) or VGSTX (STAR).
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: Why is Global Wellington not popular here?

Post by JDOG »

I owned Global Wellington for a year but then switched back to Wellington. Wellington can go up to 25% international anyway if/when they feel the time is right (above 20% already gets one most of the international diversification benefit) and the large domestic blue chips Wellington invests in have tons of international exposure anyway. Additionally, Wellington is the flag-ship fund... Global Wellington is FAR smaller by comparison. I have to believe Wellington will put their most talented managers on their largest fund... Wellington has a very respectable nearly 100 year history. I suspect it will continue to do so... even with "only" up to 25% international equity exposure. Its fees are also lower than Global Wellington. Also... if the US hits a Japan type domestic equity slog... my guess is Wellington's prospectus will probably be changed anyway to allow more than 25% international exposure...
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Re: Why is Global Wellington not popular here?

Post by Django Ii »

Wellington added FAANG stocks in the not too distant past. Global Wellington didn't follow. The idea that Global is just Wellington with some international stocks tacked on doesn't seem true in their current state.
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