Two funds for retirees who don’t know a lot about investing
Often over the past 20 years I have recommended Vanguard Wellesley Income Fund VWIAX, +0.25% and/or Vanguard Wellington Fund VWENX, +0.27%.
For conservative retirees that I don’t know well, Wellesley has become what I regard as my best piece of advice.
Wellesley has been taking good care of investors since 1970. Its portfolio is normally 40% in equities, 60% in bonds. This is a low-cost actively managed fund, holding about 70 large-cap stocks (mostly value stocks) and about 1,300 bonds.
For those who are less conservative, Wellington is my go-to suggestion, especially for people who value a very long track record.
Wellington has been in business since 1929 and was the industry’s very first balanced fund.
Wellington’s typical 60/40 split of equities and bonds mirrors the way the trustees of many large pension funds invest. They know they need reliable long-term growth and that their portfolios must, in all circumstances, be able to pay their pensioners.
Wellington is actively managed, with about 60 large-cap stocks and about 1,100 bonds.
Note: My wife and I prefer an overall 50/50 allocation of equities and bonds. If that appeals to you, you could achieve that by splitting your money evenly between Wellesley and Wellington.
Random stuff I find interesting and you may not.
