The Stodgy Vanguard Wellington Fund Still Delights Investors
Wellington, a balanced fund, is almost 100 years old.

The world has changed considerably since Vanguard Wellington (VWELX) opened to investors in July 1929, months before the stock market crashed. But the fund’s objective, to provide growth and income with a mix of 65% stocks and 35% bonds, has remained constant. It's a member of the Kiplinger 25, the list of favorite low-fee funds.
Assessing the performance of a balanced fund is tricky. You can’t directly compare Wellington’s returns with those of Standard & Poor’s 500-stock index, and a professionally managed index consisting of 65% U.S. stocks and 35% U.S. bonds doesn’t exist. The best measure, then, is to pit Wellington against its peer group, the lyrically named (by Morningstar) “allocation—50% to 70% equity” category. Over the past year, Wellington outpaced its average rival by 1.7 percentage points.
Edward Bousa picks Wellington’s stocks. Big gains in Wellington’s financial holdings, particularly in the early stretch of the period, boosted results, as did shares of some industrial, consumer, energy and materials companies. At last report, the fund had 25% of its assets in financial stocks, well above their 14% weight in the S&P 500.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Wellington’s bond holdings, chosen by John Keogh, Loren Moran and Michael Stack, consist mostly of high-quality corporate and government debt. Rising interest rates over the past 12 months (the benchmark 10-year Treasury bond, which yielded as little as 1.5% in September 2016, paid 2.1% on August 31) posed a “huge headwind” for Wellington’s fixed-income holdings, says Moran. She and her colleagues buy mostly government-backed bonds and corporate debt rated single-A or better. But Wellington got a boost over the past year from a healthy dose of corporates rated triple-B (the lowest investment-grade rating), which benefited from an improving economy. The fund recently had 18% of its bond holdings in triple-Bs.
Discovery discovery. Several readers have told us that when they tried to invest in T. Rowe Price International Discovery through their Schwab accounts, they were told that the fund was closed. In fact, the fund is open to new individual investors but closed to advisers who want to buy the fund for the first time. Individual investors who want to make an initial investment in Discovery through Schwab must call 800-435-4000 to buy shares.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.
-
Is Your Social Security Earnings Record Wrong? Here's How to Fix It
Your Social Security benefits are based on your Social Security earnings record. It's important to review your records to avoid having your benefits reduced.
-
Stock Market Today: Markets Discount Another U.S. Downgrade
After Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Stock Market Today: Markets Discount Another U.S. Downgrade
After Friday's closing bell, Moody's followed Standard & Poor's and Fitch and cut its rating on U.S. government debt.
-
Stock Market Today: Investors Look on the Bright Side
A generally good week closes on another positive note, as investors, traders and speculators look for fresh catalysts.
-
Stock Market Today: Stocks Climb More Walls of Worry
Volatility is back in a normal range, and the trend for the main equity indexes remains positive despite specific and general headwinds.
-
Stock Market Today: Nasdaq Outperforms as Big Tech Rallies
The Dow Jones Industrial Average closed lower for a second day as Amgen and Merck fell.
-
Stock Market Today: UnitedHealth Drags on Dow After CEO Splits
UNH created headwinds for the price-weighted Dow on news that its embattled CEO, Andrew Witty, is stepping down.
-
Stock Market Today: Dow Gains 1,160 Points on U.S.-China Trade Deal
The two countries agreed to a 90-day truce that will give them time to work on more substantive trade negotiations.
-
Stock Market Today: Investors Weigh Weekend Negotiations
Investors, traders and speculators will look to Switzerland for answers about the most compelling issue confronting global markets.
-
Stock Market Today: Stocks Rise on Trump Trade Deal
The U.S. and the U.K. agreed to a trade agreement that includes lower automobile tariffs.