Vanguard Wellington Fund (VWELX)

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Summary

From Vanguard:

Founded in 1929, Wellington™ Fund is Vanguard’s oldest mutual fund and the nation’s oldest balanced fund. It offers exposure to stocks (about two-thirds of the portfolio) and bonds (one-third of the portfolio). 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. Investors with a long-term time horizon who want growth and are willing to accept stock market volatility may wish to consider this as a core holding in their portfolio.

Investment Thesis

Wellington is considered a conservative fund, but its performance suggests otherwise. It is 65% stocks and less than 35% bonds. Its stock allocation focuses on domestic large-cap value stocks. These tend to be well-established, dividend-paying companies that are less prone to speculation and market volatility.

Wellington’s average return since its inception in 1929 is 8.27%. It has outperformed the S&P 500 over the last 20 years, despite the fund being 65% stocks and the S&P being 100% stocks.

Wellington is one of the lowest priced actively managed funds you will find with a low expense ratio, no load, and a low minimum investment. It sounds too good to be true, but it is the real deal. Vanguard was the first company to scale funds like this so that it could make them extremely affordable to middle class investors.

Statistics

Updated June 5, 2018:

Fund Profile

  • Total Assets: $103.6 billion
  • Total Holdings: 1072
  • Portfolio Turnover: 30%

Performance

  • SEC Yield: 2.59%
  • P/E Ratio:
  • Alpha: 0.99
  • Beta: 1.08
  • Average Annual Return (last 10 years): 7.45%

Fees & Minimums

  • Expense Ratio: 0.25% (investor shares)
  • Initial Minimum: $3,000
  • Additional Investment Minimum: $1
  • Max Front Load: None
  • Max Back Load: None

Note: Fees may be different in a 401(k)/403(b).

Analysis

Morningstar

  • Overall Rating: 5 Stars
  • Equity Style: Large Value
  • Bond Style: Mid-term Moderate

Portfolio

Asset Allocation

  • Stocks: 65.22%
  • Bonds: 32.16%
  • Short-term Reserves: 2.62%

Equity Allocation

Regions
  • North America: 81.65%
  • Europe: 16.64%
  • Asia: 1.72%
Top Ten Countries
  1. USA: 79.94%
  2. UK: 4.72%
  3. Switzerland: 3.33%
  4. France: 3.05%
  5. Canada: 2.56%
  6. Netherlands: 1.97%
  7. Germany: 1.13%
  8. Japan: 1.08%
  9. South Korea: 0.40%
  10. Spain: 0.30%
Sectors
  • Financials: 24.65%
  • Technology 17.43%
  • Healthcare: 14.01%
  • Industrials: 10.47%
  • Energy: 8.55%
  • Consumer Staples: 6.42%
  • Consumer Discretionary: 5.74%
  • Utilities: 4.29%
  • Telecommunications: 3.64%
  • Materials: 2.70%
  • Real Estate: 2.14%
Market Cap
  • Giant: 68.91%
  • Large: 30.53%
  • Mid: 0.56%
  • Small: 0.00%
  • Micro: 0.00%

Fixed Income Allocation

Sectors
  • Corporate: 60.22%
  • Government: 22.17%
  • Cash & Equivalents: 7.21%
  • Securitized Debt: 5.24%
  • Municipal Bonds: 5.17%
Credit Ratings
  • AAA: 25.59%
  • AA: 11.99%
  • A: 44.60%
  • BBB: 16.84%
  • BB: 0.09%
  • B and Below: 0.00%
  • Not Rated: 0.89%
Maturity Breakdown
  • 1-3 Years: 22.10%
  • 3-5 Years: 15.54%
  • 5-7 Years: 13.63%
  • 7-10 Years: 14.28%
  • 10-15 Years: 2.84%
  • 15-20 Years: 6.52%
  • 20-30 Years: 18.45%
  • Over 30 Years: 2.54%

Top Ten Holdings

  1. Microsoft (MSFT): 2.53%
  2. JPMorgan Chase (JPM): 2.26%
  3. Bank of America (BAC): 2.18%
  4. Verizon (VZ): 1.90%
  5. Intel (INTC): 1.85%
  6. Alphabet (GOOGL): 1.75%
  7. Chevron (CVX): 1.71%
  8. Bristol-Myers Squibb (BMY): 1.46%
  9. US Treasury Note 2.25%
  10. PNC Financial Services (PNC): 1.37%

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