Alternative to Vanguard Wellington

NickF

Hi,

My fiancee wants to open a mutual fund account but is restricted in the brokers she can invest with because she works for an investment advisor. She had been interested in Vanguard Wellington but can't open an account with Vanguard. Are there any suggestions for an alternative?

She can open an account with Charles Schwab, E*Trade, Fidelity, Goldman Sachs, Scottrade, TD Ameritrade among others but not Vanguard or T.Row Price.

Thanks.

mns

Vanguard Wellington is available at all those brokers except Goldman according to M* http://financials.morningstar.com/fund/purchase-info.html?t=VWELX&region=USA&culture=en-US

The transaction fees for Wellington will vary between the brokers, from memory I think it's something like:
Schwab $50
ETrade $20
Fidelity $75 (but no fee to sell)
Scottrade $17
TD Ameritrade $50

I've been happy with Fidelity and Schwab, though they are on the pricier end if the goal is to invest in Wellington, though Fidelity has a reasonably cheap program after that to regularly invest in Wellington, I think $5 or $10 per investment. Do you have any other investment plans beyond Wellington? Both Schwab and Fidelity have a large offering of no transaction fee mutual funds. Another option would be WellsTrade which gives you 100 free trades per year if you have $25k in assets (including checking and savings).

randynevin

Vanguard Wellington is an excellent balance fund. I'm not sure which of these would be available through the brokers you list, but these are other good balanced funds: FPA Crescent (probably not available), Manning&Napier Pro-Blend Ext Term S (and Moderate Term too), Oakmark Equity Income (only 20% bonds), Mairs&Power Balanced, Fidelity Balanced. Hope this helps; good luck.

Investor

I will suggest Fidelity. Yes, initial purchase is $75 but there are no sales fees and if you set up an Automatic Investment plan you can purchase additional purchases at $5 per transaction. So, if she is going to dollar cost average it could be a better deal.

scott

Another vote for FPA Crescent as an alternative balanced fund.

NickF

Thanks for all of the great suggestions.

I have investments of my own with Fidelity and I'm happy with them but the Transaction fees for Wellington make it unappealing. If she's making $100 investments at $5 or $10 dollars per investment, that's %5 or %10 in commissions and its probably better to go with another fund. Same thing with FPA Crescent, which has a transaction fee at Fidelity.

Mairs & Power Balanced is an intriguing option. Another one is Leuthold Core, though the minimum investment is pretty high ($10,000). One idea would be to instead start a two fund portfolio.

scott

I'm not a fan of Leuthold, but that's just me. I'd rather suggest Ivy Asset or the Blackrock Global Allocation fund. T Rowe also has some good balanced offerings. The Mairs and Power fund is also a good suggestion.

GregFromBoston

If you are interested in Fidelity NTF funds, Manning & Napier Pro-Blend Moderate Term (EXBAX) is worth a look. It's hard to beat Vanguard Wellington, but this one may give you a smoother ride for similar overall returns.

msf

If you're willing to live with a growth-oriented balanced fund, you could look at Janus Balanced (T class) JABAX. (Though I do also like the Manning & Napier funds recommended above as well if you're open to growth-oriented funds.) Janus has lower volatility/risk than Wellington (12.20 std dev vs. 14.84), and moderate cost (0.82%); still much higher than Wellington (0.30%), but much lower than FPA Crescent (1.13%), and a bit lower than the M&N funds (north of 1%). Its turnover, at 83% is a bit more than I'd like though (Wellington is at 35%, Crescent is even lower at 20%).

What you're not getting with any of the suggestions (including mine) is a megacap, value-oriented fund like Wellington. If that's important to you, you might look at Buffalo Balanced (BUFBX).

rmt

Look at
1) JPVTX - the equity sleeve is run by Perkins managers.
2) HLAIX - sub advised by Wellington. a global version of VWELX

ibartman

Perhaps:
LKCM Balanced, Janus Balanced, Manning & Napier Pro Blend Moderate, or Oakmark Equity and Income.

For others, do a search @ the Morningstar Fund Search (http://screen.morningstar.com/FundSelector.html) with following parameters, or something similar:

Moderate Allocation | No Load | Risk < Average | Expenses < Average | 4 or 5 Star

NickF

Thanks again for all the great suggestions. I think the big attraction of Wellington is that its hard to do better than it in a diversified portfolio, and the other options for an all-in-one fund are a little unsatisfying or unavailable (MDLOX has a load, FPACX a transaction fee and Oakmark Equity and Income is closed). My fiancee decided to go in a different direction and is leaning towards a 50/50 mix of Oakmark International Small Cap and Fidelity Strategic Income.

msf

Oakmark Equity and Income (OAKBX) is still open, just not through brokers. If your fiance is not prohibited from investing directly with the company, she could open an account there and then move it to a broker. Assuming she is still interested.

http://www.oakmark.com/funds/single/sf_o.asp?fund_id=20 (min $1K investment)

NickF

Interesting. I think she's prohibited from investing directly with the company, though.

fundalarm

i don't believe this is true, Nick. Please check with her. She can't use brokers except for those approved by her employer, but she could hold mutual funds directly with mutual fund companies. you don't have to open a brokerage account to buy a mutual fund. going to your original post, i bet she could buy that fund directly from vanguard, but she couldn't be using vanguard brokerage. i was in the same situation twice and the rule is pretty consistent across the Street. i gather GS is not an exception.

NickF

Interesting. Thanks, we'll look into that.