This week our MFO poster, Lewis Brahram wrote about a relatively new Vanguard Global Wellington fund, VGWLX with the two new managers, Nataliya Kofman and Loren Moran. The investment process, top 10 holdings and the 3-year performance versus world allocation category were discussed.
Please note Vanguard Wellington is still open to new investors at Vanguard. It may not be available in other brokerages such as Fidelity and Schwab. https://barrons.com/articles/vanguard-global-wellington-stock-bond-fund-51626277810
For disclosure, we invested with this fund several years ago and continue to build to the target allocation.
If you already using Vanguard brokerage, there is no fee to buy or sell. The other approach is buy large block of the fund at Fidelity and use their automatic investment to add in the future, $5 per transaction.
Given that many of its stocks are culled from "the usual suspects", I'd be careful about using this with another large cap fund. ITSM that it would better be paired with funds that invest in less well known companies - mid or small cap, or EM companies (100% of its foreign holdings are in developed markets).
I'm not disregarding Lewis' observation that some of the fund's holdings benefit from EM business. Rather I'm suggesting how to look for funds that don't overlap too much with this one.
Maybe PRIDX as a Small Cap International choice as well.
I try to take a long term view when I venture internationally / globally due to volatility concerns. Volatility management led me to VMVFX (a Min Vol Fund). Charting funds against VMVFX offers one way of determining whether volatility is trending up or down against say a low vol fund such as VMVFX (a global fund).
Here's GISOX compared to VMVFX...more "positive volatility" exhibited by GISOX since inception.
Thanks for remindering VMVFX. I left the fund when the original manager left and the portfolio underwent considerable changes that did not make sense. Moved the asset to a growth oriented international small cap several years ago. More volatile for sure, but the fund has a shorter recovery period and about the same % drawdown as VMVFX in 2020. GISOX has a hard close when the fund is held outside of Grandeur Peaks.
PRIDX is closed to new investors. There are not many good international small cap funds.
Thank you Lewis and Sven for sharing.
Glad to see the fund coming into its own.
Here's comparison of a D&C "equivalent" portfolio (60 / 40 DODWX / DODLX) with VGWAX, since the latter's launch. Better overall return and indeed less volatility.
RPGAX invests 10% in hedge fund while VGWAX has none. This is also reflected in the lower ER with VGWAX, 0.34% (Admiral shares) vs. 0.95%.
The equity portion of RPGAX invested in both value and growth stocks or "blend" style. VGWAX is traditionally a value fund.
This fund is more growth oriented than Vanguard. If rotation from growth to value style holds, VGWAX will stay competitive. For now I have too many overlapp with the top 10 holdings of TRP. Thus I will stay with VGWAX.
Any of these strategies are not cheap. So it must derive some form of value to the fund.
Though there's a perception of Wellington Management as a value house, their funds wander over much of the "map". For example, HGIYX meanders along the blend/growth boundary, currently holding more assets in growth than in blend securities.
Lately, VWELX's portfolio has been solidly blend. 46% LCblend, 27% LCG, 24% LCV. Of its top four holdings (14.5% of its portfolio), three companies are LCG, one is LCV.
In contrast, VGWAX has a discernable value tilt: 42% LCV, 35% LC blend, 13% LCG (virtually all the rest is MC blend). Of its top four holdings (7.2% of its portfolio), three companies are LCV, one is LCG.
These style differences could account for much of the difference in performance. Over the lifetime of VGWAX, the Russell 1000 Value Index (IWD) has averaged 9.8% return, while the Russell 1000 Index (IWB) has averaged 16.96%.
Comparisons on Portfolio Visualizer.
“It’s far better to buy a wonderful company at a fair price than a fair company at a wonderful price.” – Warren Buffett