Closest way to mimic Wellington?
Closest way to mimic Wellington?
Wellington is roughly a 60/40 fund but concentrated positions in the equities.
As a curiosity exercise, what would the closest way to mimic this fund with ETFs be?
VTI and VOO don't seem to be right, so VV (Vanguard Large-Cap ETF) plus bonds?
* I'm not planning on doing this, trying to learn and explore more things.
Thanks!
As a curiosity exercise, what would the closest way to mimic this fund with ETFs be?
VTI and VOO don't seem to be right, so VV (Vanguard Large-Cap ETF) plus bonds?
* I'm not planning on doing this, trying to learn and explore more things.
Thanks!
Doing nothing is doing something.
-
- Posts: 3574
- Joined: Fri Jul 19, 2013 2:45 pm
Re: Closest way to mimic Wellington?
Try the search box. It's been discussed many times.
Re: Closest way to mimic Wellington?
Also when you backtest these three they're effectively the same.
Doing nothing is doing something.
Re: Closest way to mimic Wellington?
Of course - I should have started there
Doing nothing is doing something.
Re: Closest way to mimic Wellington?
Is there a way to factor in expense ratios (and taxes) on a backtest?
Curious what the real world difference between these would really be.
Curious what the real world difference between these would really be.
Doing nothing is doing something.
Re: Closest way to mimic Wellington?
It seems that over time Wellington went from a value tilted fund to a blend. Morningstar calls it a blend and vanguard considers it a value fund. Idk, the top 10 seem pretty close to any large cap blend fund you can find and maybe intermediate corporate for the bond portion.
1 fund
Re: Closest way to mimic Wellington?
Try swapping the total bond for intermediate corporate and go with a 65/35 allocation.
1 fund
-
- Posts: 4215
- Joined: Sun May 05, 2019 11:23 am
Re: Closest way to mimic Wellington?
What? How does anyone come up with the s&p 400 as the equity portion of Wellington? It’s nowhere near the megacap makeup of Wellington.Robot Monster wrote: ↑Sun Dec 05, 2021 12:15 pm I found an old post from 2017 answering this, link but since then the Wellington-mimic has severely underperformed Wellington, 8.23% vs 11.28%.
link
1 fund
Re: Closest way to mimic Wellington?
I didn't look very deep, but I assume Wellington had much more large and dividend paying stocks than the midcap index. You know what they say about past results and future performance. I'd bet on a similar investment style coming closer to a past curve fit.Robot Monster wrote: ↑Sun Dec 05, 2021 12:15 pm I found an old post from 2017 answering this, link but since then the Wellington-mimic has severely underperformed Wellington, 8.23% vs 11.28%.
link
Sounds like TSM without small caps, and since small caps isn't that significant market cap in TSM, it would be fairly close.
("The fund invests 60% to 70% of its assets in dividend-paying, and, to a lesser extent, non-dividend-paying common stocks of established medium-size and large companies.")
Code: Select all
Top 10 Holdings (6.19% of Total Assets)Get Quotes for Top Holdings
Name Symbol % Assets
Cognex Corp CGNX 0.66%
Molina Healthcare Inc MOH 0.66%
Signature Bank SBNY 0.63%
SolarEdge Technologies Inc SEDG 0.63%
Ceridian HCM Holding Inc CDAY 0.62%
Camden Property Trust CPT 0.61%
FactSet Research Systems Inc FDS 0.60%
Repligen Corp RGEN 0.60%
Williams-Sonoma Inc WSM 0.60%
Masimo Corp MASI 0.58%
Top 10 Holdings (25.82% of Total Assets)Get Quotes for Top Holdings
Name Symbol % Assets
Alphabet Inc A GOOGL 4.98%
Microsoft Corp MSFT 4.51%
Facebook Inc A FB 2.65%
JPMorgan Chase & Co JPM 2.35%
Charles Schwab Corp SCHW 2.33%
McDonald's Corp MCD 2.20%
Apple Inc AAPL 2.15%
Taiwan Semiconductor Manufacturing Co Ltd ADR TSM.TW 1.56%
Procter & Gamble Co PG 1.55%
The Home Depot Inc HD 1.54%
Re: Closest way to mimic Wellington?
After reading a few threads on W&W, my conclusion is that if you want a Wellington-like investment then just buy Wellington. The ER on Admiral Shares is quite reasonable for active management.
Re: Closest way to mimic Wellington?
That's the exact same thing I've come up with.
Doing nothing is doing something.
- jeffyscott
- Posts: 13438
- Joined: Tue Feb 27, 2007 8:12 am
Re: Closest way to mimic Wellington?
I think of Wellington as being quality/dividend growth for stocks (and managed by the Wellington Management co.) and mostly, but not exclusively, investment grade corporate bonds. And based on that have thought that 65% Dividend Growth (VDIGX) and 35% Intermediate Investment Grade (VFIDX) would be the best match and it is pretty clos. So, if looking for index funds, I would think Dividend Appreciation (VIG/VDADX) and Intermediate Corporate Bond (VICSX/VCIT) .
https://www.portfoliovisualizer.com/bac ... tion5_3=35
https://www.portfoliovisualizer.com/bac ... tion5_3=35
- Whitefalcon
- Posts: 46
- Joined: Thu Feb 27, 2020 1:38 pm
Re: Closest way to mimic Wellington?
Wellington is a actively managed fund with a low expense ratio, that accordingly can change based on the Vanguard management team's strategy. You can certainly closely mimic the funds current position, but are you prepared to change every time it does? If you did, wouldn't it make more sense to just trust the funds management team?nasrullah wrote: ↑Sun Dec 05, 2021 11:34 am Wellington is roughly a 60/40 fund but concentrated positions in the equities.
As a curiosity exercise, what would the closest way to mimic this fund with ETFs be?
VTI and VOO don't seem to be right, so VV (Vanguard Large-Cap ETF) plus bonds?
* I'm not planning on doing this, trying to learn and explore more things.
Thanks!
-
- Posts: 1808
- Joined: Sat Jun 09, 2018 11:52 am
- Location: St. Louis
Re: Closest way to mimic Wellington?
The advantage I see is you control the taxes more if you want to do this idea in a taxable account. Some of us have to hold bonds in taxable because of lack of space other places.
Re: Closest way to mimic Wellington?
Surprised me how often people ask this question. I believe I see this topic at least every year, sometimes more often. Why on earth you want to mimic Wellington? To save .1% in fee? or just for fun?
- anon_investor
- Posts: 15111
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Closest way to mimic Wellington?
That ends up only being back tested from 2011 which to me is fairly limited. Ideally I'd rather see something going back to at least the later 1990s.jeffyscott wrote: ↑Sun Dec 05, 2021 4:18 pm I think of Wellington as being quality/dividend growth for stocks (and managed by the Wellington Management co.) and mostly, but not exclusively, investment grade corporate bonds. And based on that have thought that 65% Dividend Growth (VDIGX) and 35% Intermediate Investment Grade (VFIDX) would be the best match and it is pretty clos. So, if looking for index funds, I would think Dividend Appreciation (VIG/VDADX) and Intermediate Corporate Bond (VICSX/VCIT) .
https://www.portfoliovisualizer.com/bac ... tion5_3=35
----------------------------- |
If you think something is important and it doesn't involve the health of someone, think again. Life goes too fast, enjoy it and be nice.
- jeffyscott
- Posts: 13438
- Joined: Tue Feb 27, 2007 8:12 am
Re: Closest way to mimic Wellington?
You can get a few more years with intermediate investment grade in place of the corporate bond index, but still only back to 2006 due to VIG. And with VDIGX can get a few more, going back to 2003 when the utilities fund became divided growth.rich126 wrote: ↑Tue Dec 07, 2021 4:29 amThat ends up only being back tested from 2011 which to me is fairly limited. Ideally I'd rather see something going back to at least the later 1990s.jeffyscott wrote: ↑Sun Dec 05, 2021 4:18 pm I think of Wellington as being quality/dividend growth for stocks (and managed by the Wellington Management co.) and mostly, but not exclusively, investment grade corporate bonds. And based on that have thought that 65% Dividend Growth (VDIGX) and 35% Intermediate Investment Grade (VFIDX) would be the best match and it is pretty clos. So, if looking for index funds, I would think Dividend Appreciation (VIG/VDADX) and Intermediate Corporate Bond (VICSX/VCIT) .
https://www.portfoliovisualizer.com/bac ... tion5_3=35
I'm also basing it on the investment style. VDIGX and VFIDX are, I believe, very similar to Wellington's components, so then it's a matter of finding the closest index subs for those two.
-
- Posts: 58
- Joined: Wed Oct 20, 2021 8:05 am
Re: Closest way to mimic Wellington?
I don't understand the love for the Wellington fund. I'm all about making money. That's why I'm 100% VGT.
-
- Posts: 1808
- Joined: Sat Jun 09, 2018 11:52 am
- Location: St. Louis
Re: Closest way to mimic Wellington?
Check out thisRasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fund. I'm all about making money. That's why I'm 100% VGT.
https://www.youtube.com/watch?v=m3UuOLT1YZs
- anon_investor
- Posts: 15111
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Closest way to mimic Wellington?
How long have you had that allocation?Rasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fun.d. I'm all about making money. That's why I'm 100% VGT.
-
- Posts: 58
- Joined: Wed Oct 20, 2021 8:05 am
Re: Closest way to mimic Wellington?
A few years, my man.anon_investor wrote: ↑Tue Dec 07, 2021 11:30 amHow long have you had that allocation?Rasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fun.d. I'm all about making money. That's why I'm 100% VGT.
Re: Closest way to mimic Wellington?
Why mimic it when you can just buy it?
Re: Closest way to mimic Wellington?
Why mimic? Maybe don’t want to have a vanguard account.
Re: Closest way to mimic Wellington?
A fair question honestly but I can think of some reasons:
1. Not available to investor through their 401K, IRA, investment account etc. or high cost to buy
2. Would prefer ETF to mutual fund for whatever reason
3. Would prefer two funds to TLH
4. Would prefer to mimic through an index approach versus active approach (I realize this may be counter intuitive)
5. Is hyper cost sensitive and wants to try to mimic at lower cost
But yes, it is a good question.
Re: Closest way to mimic Wellington?
NTSX is logically better than any 60/40 fund.
- anon_investor
- Posts: 15111
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Closest way to mimic Wellington?
Forward thinking! My VGT allocation has only been around 15% the last few years, but boy has it done well.Rasputin13 wrote: ↑Wed Dec 08, 2021 6:50 amA few years, my man.anon_investor wrote: ↑Tue Dec 07, 2021 11:30 amHow long have you had that allocation?Rasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fun.d. I'm all about making money. That's why I'm 100% VGT.
Re: Closest way to mimic Wellington?
+1Lastrun wrote: ↑Wed Dec 08, 2021 8:05 amA fair question honestly but I can think of some reasons:
1. Not available to investor through their 401K, IRA, investment account etc. or high cost to buy
2. Would prefer ETF to mutual fund for whatever reason
3. Would prefer two funds to TLH
4. Would prefer to mimic through an index approach versus active approach (I realize this may be counter intuitive)
5. Is hyper cost sensitive and wants to try to mimic at lower cost
But yes, it is a good question.
"4. Would prefer to mimic through an index approach versus active approach (I realize this may be counter intuitive)"
^^^ This has the potential to be a big advantage. In a taxable account, Wellington throws off sizable cap gain distributions. Most of that could be avoided with a passive indexing and use of ETFs.
-
- Posts: 58
- Joined: Wed Oct 20, 2021 8:05 am
Re: Closest way to mimic Wellington?
15%? Boy, you need to up your game.anon_investor wrote: ↑Wed Dec 08, 2021 8:42 amForward thinking! My VGT allocation has only been around 15% the last few years, but boy has it done well.Rasputin13 wrote: ↑Wed Dec 08, 2021 6:50 amA few years, my man.anon_investor wrote: ↑Tue Dec 07, 2021 11:30 amHow long have you had that allocation?Rasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fun.d. I'm all about making money. That's why I'm 100% VGT.
- anon_investor
- Posts: 15111
- Joined: Mon Jun 03, 2019 1:43 pm
Re: Closest way to mimic Wellington?
The BH in me says it's okay to have a "tilt" but all-in, maybe beyond my risk tolerance and I am ~95% equities. Kudos to you though, you definitely have done well.Rasputin13 wrote: ↑Thu Dec 09, 2021 12:25 pm15%? Boy, you need to up your game.anon_investor wrote: ↑Wed Dec 08, 2021 8:42 amForward thinking! My VGT allocation has only been around 15% the last few years, but boy has it done well.Rasputin13 wrote: ↑Wed Dec 08, 2021 6:50 amA few years, my man.anon_investor wrote: ↑Tue Dec 07, 2021 11:30 amHow long have you had that allocation?Rasputin13 wrote: ↑Tue Dec 07, 2021 7:28 am I don't understand the love for the Wellington fun.d. I'm all about making money. That's why I'm 100% VGT.