FMSDX or VWIAX

Comments

• JD_co

  May 10

  Would it be a sin to buy both?
• fred495

  May 10 edited May 10

  I hear you, but I try to limit the number of positions in my portfolio.
  Thanks for the suggestion, JD
• larryB

  May 10

  @ Fred495. Pondering the same question. I think you nailed the key differences. My research has shown that the Fidelity product has a broader mandate and may move into areas that might not be what you are looking for. Perhaps greater returns but a bumpier ride. The Wellington management team is deep and experienced,,, what you see is what you get.
• fred495

  May 10

  larryB said:

  @ Fred495. Pondering the same question. I think you nailed the key differences. My research has shown that the Fidelity product has a broader mandate and may move into areas that might not be what you are looking for. Perhaps greater returns but a bumpier ride. The Wellington management team is deep and experienced,,, what you see is what you get.

  
  Talking about trying to muddy the waters. I forgot about another moderately conservative allocation fund, PRCFX (T. Rowe Price Cap Apprec and Income), that is brand new but is run by the excellent and experienced manager of PRWCX.
  
  Have you considered this fund in your deliberations?
  
  
• yogibearbull

  May 10

  FMSDX is a multi-asset fund that holds stocks, bonds and some alternatives. It is riskier than VWIAX. Although classified as conservative-allocation (CA), it is somewhere between CA and MA, taking into account its lower grade bonds.
  
  VWINX / VWIAX is a classic stock-bond CA fund. Stocks are value/dividend oriented and bonds investment-grade. A very simple formula at very low ER. It's so cheap and simple that no one else has bothered copying it.
• fred495

  May 10

  yogibearbull said:

  FMSDX is a multi-asset fund that holds stocks, bonds and some alternatives. It is riskier than VWIAX. Although classified as conservative-allocation (CA), it is somewhere between CA and MA, taking into account its lower grade bonds.
  
  VWINX / VWIAX is a classic stock-bond CA fund. Stocks are value/dividend oriented and bonds investment-grade. A very simple formula at very low ER. It's so cheap and simple that no one else has bothered copying it.

  
  Thanks, yogi.
  What bothers me about VWIAX is its poor return over the past three years.
  I forgot about another moderately conservative allocation fund, PRCFX (T. Rowe Price Cap Apprec and Income), that is brand new but is run by the excellent and experienced manager of PRWCX.
  Do you have an opinion about PRCFX?
• msf

  May 10

  Looking at the portfolio data, a couple of top line figures stand out. (Yogi also commented on much of this; he posted as I was composing.)
  
  M* reports that FMSDX has 45% of its assets in its top ten holdings, but that's misleading. Its top 4 holdings, at 11%, 8.5%, 8.5%, and 8% are Treasuries. Disregarding that, its portfolio doesn't look nearly so concentrated (i.e. closer to VWIAX's 12% of assets in top 10 holding).
  
  Portfolio composition is a different story. While both funds are classified as moderately conservative (meaning similar stock/bond ratios), the Fidelity fund is noticeably more aggressive - as one might infer from its volatility.
  
  Fidelity says that its fund is 41.5% in equities with the rest (excluding 1.35% cash/other) in bonds. Vanguard says its fund is 37.12% in equities with the rest (excluding 1.12% short term reserves) in bonds. Superficially similar, but ...
  
  https://fundresearch.fidelity.com/mutual-funds/composition/31638R717
  https://investor.vanguard.com/investment-products/mutual-funds/profile/vwiax#portfolio-composition
  
  Vanguard says that all of its bonds are investment grade (albeit 17% Baa), while Fidelity reports that nearly a third of its bonds are junk bonds. Those typically behave more like equities. In this sense, the Fidelity fund begins to look more like a moderate allocation fund. In fact, M* classified the fund this way in 2021 and 2022.
  
  Wellesley is a traditional hybrid fund, with a large cap value-leaning equity portfolio. FMSDX currently has more of a large blend orientation, though it tends to skew more toward mid caps (even now it is right on the mid/large boundary).
  
  All of these differences help to understand the overall performance differences you're seeing. They're both fine funds and which one you pick would seem to depend on the type of fund you want.
• yogibearbull

  May 10

  I don't have access to PRWCX, so I am using the combo TCAF + PYLD. That mix can be adjusted for PRCFX too, so I am not buying it. But it's a good alternative to VWIAX.
• fred495

  May 10 edited May 10

  Thank you so much, again, yogi and msf, for your excellent and very helpful comments.
  I am leaning towards PRCFX at this point.
  
  P.S. By the way, I have to say that both of you have a knack for explaining and commenting on topics that are so succinct and informative that I can't help myself reading your posts whether or not they pertain to any of my own issues. It's just a pleasure to read them.
  I really appreciate you guys so much for being so helpful in sharing your extensive knowledge.
• larryB

  May 10

  @Fred495. Yes I have looked at PRCFX. yes, VWIAX has had a disappointing most recent three year but lack of tech and longish duration FI explain that. Part of my search is for one fund my widow will be able to live with. Simplicity. But for me I want to dial up or down the FI portion myself. So I dither the months away with tons of 5% CD’s and 5% mm. My short terms goals are limited (happily) and longer term it’s the portfolio with the fewest parts and lower SD.
• Derf

  May 10

  Seems to me "when interest rates decline", is the question to be answered . Anyone care to answer when that will happen ? I own VWINX & a starter position in PRCFX.
• Level5

  May 10 edited May 10

  I’ve had 12% of our portfolio in VWIAX for some time, but have paired it back by 1/3. With VWIAX invested in value stocks and intermediate bonds, its performance has lagged for several years.
  
  When I first started investing, I had bought into the large and small value concept that they are the sweet spot of equity investing. This has not been my personal experience these last few years. This may still bare out over time, but my personal timeline is more limited than the market itself.
  
  I’ve slowly been reallocating to more of a total stock market focus. There are so many interesting funds that are available, which I’ve dabbled in over the past few years. But once I’ve purchased a starter position, I ask myself if I’m willing to invest an amount that can make a difference in my total returns, and often the answer is no and I sell that fund. After being an investor in VWIAX for many years, the answer to that question has been shifting.
• shipwreckedandalone

  May 12

  Be mindful of any PM changes.
• fred495

  May 12

  shipwreckedandalone said:

  Be mindful of any PM changes.

  
  Do you have a particular fund in mind? VWIAX or FMSDX or PRCFX?
  
  
• yogibearbull

  May 12

  VWINX has gone through manager changes that were planned & telegraphed.
• stillers

  May 12

  Both OP funds are worthy Conservative Allocation funds but vastly different. We have owned both for long periods of time since 1980 but own neither now, and have likely parted ways with both permanently.
  
  If choosing between the two, we would chose FMSDX as it is a unique fund that provides exposure and style that we do not otherwise get enough of.
  
  VWIAX is pretty much Dead To Me for the time being. Significant underperformance over the past few years that we fortunately missed most of, having dropped it a while ago. Formerly the gold standard for its style, we are currently outperforming it with a combo of OAKMX (for the Value stock side) and a CP CD ladder for the FI side.