VWINX

shipwreckedandalone

I would be interested in comments on the new manager change and current portfolio constitution vs previous historical metrics.
Please correct me if I am wrong this was a quick analysis......notable changes: bond Credit Quality of AAA now 26% vs old 21. Effective Duration now 6.61 vs 8.03 old. Value now 38% vs 55-70% old. Blend now 58% vs 21% old. Standard deviation seems to have increased maybe simply due to market increased volatility. TO rate now 58% vs 53 old.
I guess the Value equity % change is the most notable change. Comments?

LewisBraham

I honestly think this is an excellent fund for a conservative investor to buy, and my opinion remains that today. Regarding the value vs blend shift, since value stocks have performed so well in 2022 the shift may indicate that the managers think the relative attractiveness of value stocks has diminished as growth stocks are cheaper now than at the start of the year. But that’s just a guess.

yogibearbull

I still like VWINX/ VWIAX as a plain vanilla mix of div-stocks + inv-grade (mostly corporates). It is offered at ER of 23/16 bps only.

But I have shifted quite a bit into VG multi-asset VPGDX (similar to Fido FMSDX; allocation comparable to VWELX/ VWENX) that may have a better rebound potential.

Sven

In the long run, VWINX is a fine allocation fund for conservative investors. Wellington has a deep bench of managers and new managers are likely been a co-manager for several years before assuming the role as the full manager.

LewisBranham is spot on. It is common that value managers buy growth stock when valuation becomes attractive (and potentially providing better earning in the future). So timing is crucial for getting at a good price. Case in point, VWELX picked up several FAANG stocks too early this year and it did the opposite.

On the bond allocation, VWINX’s duration was a bit longer than the intermediate term bonds, 5-6 years. This was pointed out by another MFO poster. It is tough to have more long duration bonds in the mx in order to provide decent yield to investors, but also affect the bonds more with the aggressive rate hikes. The recent reduction on its duration is to improve the bond risk going into 2023.

sma3

I sold my VWINX in 2021 bothered by the duration. I am unsure why the managers did not reduce the duration going into 2022 given the likelihood that interest rates would spike. I have to assume that they felt many of their customers wanted income but the difference between the yields of their bonds and MM was small. VWINX has rather promoted itself as a "low volatile" fund, which was not the case this year.

If they are really bumping up their exposure to Growth, I wonder if they are ready for the increased volatility that may result if interest rates don't come down. It would seem that the bonds and higher growth names will both dive if interest rates bump up

shipwreckedandalone

I just hope VWINX has not quietly changed to more growth like VWELX did some time ago (using same research employee base). Maybe VWELX change was deliberately announced?? Don't remember.

yogibearbull

@sma3, note that @Sven was talking about both VWINX and VWELX. Only VWELX has modified its equity orientation from value to blend/growth. I haven't heard any such recent thing for VWINX (of course, it has changed gradually over the years).

shipwreckedandalone

New purchases: CTRA 6/22, EOG 12/21, NextEra 9/22.

Puddnhead

Hi guys,
This is a fund you don't hear about anymore....once much loved....now, a backwater and forgotten fund. As far as any changes to the fund, they seem to reflect the change in time or market since Covid, so they worry me not. I have it on a short buy list. Will wait 'till February to make a buy. As for being on Fido, that means my Buys are larger than with other funds. Would love to see a list of those that own the fund.
God bless
the Pudd

p.s.
I tend to use this fund as a bond fund since I have none right now.

sma3

@yogibearbull

Thanks for the correction. The PE of VWINX is still pretty close to SP500 at 13.5 but M* has in in Large Value. Probably correct but not deep value

shipwreckedandalone

The sole decision making is the responsibility of the new portfolio manager(s). The research staff of several hundred (last I checked) provides data. So I personally believe there is more risk in the mgr change than the average Wellington investor believes. Having said that, I will give them the benefit of the doubt until proven otherwise. Great track record thus far.