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Post by chang on Jan 2, 2021 1:10:39 GMT
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Post by FD1000 on Jan 2, 2021 4:53:38 GMT
The following observation may answer your questions:
1) What % Wellesley is of your portfolio?
2) Wellesley has been a great fund for decades, either you like it or not.
3) I can always come up with 2-3 funds instead of allocation funds. The only exception is PRWCX which is really not your typical allocation fund.
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Post by chang on Jan 2, 2021 5:10:39 GMT
The following observation may answer your questions: 1) What % Wellesley is of your portfolio? 2) Wellesley has been a great fund for decades, either you like it or not. 3) I can always come up with 2-3 funds instead of allocation funds. The only exception is PRWCX which is really not your typical allocation fund. I'm afraid they don't. 1) No relevance to my question. Assume $1m in round numbers. (VGWAX is my biggest single position.) 2) I don't see the point. Yes, I like it. The question still stands. Bonds might be in a place now that they have not been in four decades. Is the bond bull market over? Driving using the rear-review mirror strikes me as potentially very dangerous now. 3) Great, but nothing to do with my question. |
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Post by rhythmmethod on Jan 2, 2021 16:59:05 GMT
In a word, yes. However, VWIAX seems to raise concerns every few years and in the end does okay. My only pure exposure to trad IG bonds of moderate/longish duration in via VWIAX. In the end I think the active balancing that they do adds value that may be lost due to duration. I balance this with BSV, PIMIX, PDIIX (I know you're not a fan) and EDV. I call upon Swami yogibearbull to weigh in on this. |
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Post by yogibearbull on Jan 2, 2021 18:24:27 GMT
From fund reports and data [VG website, M*, PV analysis], it seems that the equity side has lot of cyclical exposure. The bond side is duration neutral wrt its benchmark [US Credit A or Better]; there is good BBB exposure too. Manager comments in the annual report that credit risk is reduced for bonds, there is decent liquidity [but cash/short-term reserves shown not high], and doesn't expect the Fed to tighten soon. Bond portfolio looks like a barbell, with not much in 10-20 yrs, but heavy in under 10 yrs and over 20 yrs. As a holder, I keep an eye but results for 2020 look fine for 41% effective-equity [nominal equity objective 35-40%].
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Post by Norbert on Jan 2, 2021 18:45:09 GMT
chang"Anyone bothered by Wellesley's duration?" The Wellesley managers probably don't think that rates will go up in 2021. So, stick with a moderate duration to balance the equity exposure. I don't think that inflation or rising rates are a 2021 worry. N.
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Post by chang on Jan 3, 2021 0:30:27 GMT
The feedback is appreciated. I, too, don't see much risk of runaway inflation or interest rate hikes this year. I am generally concerned about yields being so low (prices high), and asking myself if I am getting paid adequately for the downside risks. Bonds are paying very little income, and we all saw last year how quickly bond prices can move - not necessarily from inflation or interest rate changes.
It is probably worth pointing out that Wellesley mainly owns corporates and not government bonds, and that's probably a good thing. As RM said, Wellesley usually seems to do alright in the end. It's a pretty easy fund to own.
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Post by FD1000 on Jan 3, 2021 4:01:24 GMT
The following observation may answer your questions: 1) What % Wellesley is of your portfolio? 2) Wellesley has been a great fund for decades, either you like it or not. 3) I can always come up with 2-3 funds instead of allocation funds. The only exception is PRWCX which is really not your typical allocation fund. I'm afraid they don't. 1) No relevance to my question. Assume $1m in round numbers. (VGWAX is my biggest single position.) 2) I don't see the point. Yes, I like it. The question still stands. Bonds might be in a place now that they have not been in four decades. Is the bond bull market over? Driving using the rear-review mirror strikes me as potentially very dangerous now. 3) Great, but nothing to do with my question. 1) If a fund is under 5% than it doesn't matter much 2) Wellesley have done pretty well for decades and I don't see any reason why I would dump it now, their 2 main categories are a great compromise combo: LC stocks + Corp bonds 3) I have said for years that I prefer to own stocks funds + bond funds than allocation funds because it let me decide on exactly what stocks and especially bonds I want. That's just me. Wellesley as a generic conservative fund is one of the best, either you think so and hold or not. Lastly, your style can have another layer of options. My point of all the above is trying to understand what exactly are you trying to achieve? I have specific solutions for specific needs ;-) |
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Post by steadyeddy on Jan 7, 2021 0:18:14 GMT
Chang - I own boat-load of Wellesley - it is my largest holding. Call it blind trust I have in Wellington Management team's recipe for this Wellesley. I believe the average credit quality of their bond portfolio is much higher than BBB although I did not calculate it. I also know they are carrying a bit higher equity stake than normal. At this point in time, I think they know better than I on this topic  |
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Post by chang on Jan 7, 2021 0:44:00 GMT
steadyeddy Yeah I agree that Wellesley's history speaks for itself. Like many good machines, you probably can't figure out how it works by disassembling it and laying all the pieces out on the floor.
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Post by steadyeddy on Jan 7, 2021 0:55:24 GMT
steadyeddy Yeah I agree that Wellesley's history speaks for itself. Like many good machines, you probably can't figure out how it works by disassembling it and laying all the pieces out on the floor. I totally agree Chang. After decades of investing experience and trying every darn thing under the sun I have come to the conclusion that Wellesley is the boat I want to be in when I retire. So far it has not disappointed. It is a SUBSTANTIAL portion of my portfolio. All the best! |
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