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Outflows: VWELX, VWINX, VDIGX, VPMAX

yogibearbullyogibearbull
edited 7:46AM in Fund Discussions
Morningstar has a short blurb on the 2024 outflows for 4 popular Vanguard funds - VWELX, VWINX, VDIGX, VPMAX. Reasons vary - bonds have been a drag for allocation funds & VPMAX is a high conviction growth fund that can misfire (so, it needs patience).

I was curious if this was an issue for 2024 only or had a longer-term pattern. MFOP FLOWS came in handy to determine that there have been significant outflows for 5 years; in the prior times, there were mostly inflows.

https://www.morningstar.com/funds/4-vanguard-funds-pummeled-by-outflows-2

MFOP FLOWS
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Comments

  • InformalEconomist
    Thanks for posting this and checking into past five years.
    Russel Kinnel, author of the article, speculates:
    I think the driver of flows in this case is the long-running move to target-date funds in 401(k)s.
    He also notes VDIGX's lower exposure to Mag 7 tech funds.
    I would add, VWELX and VWINX are among Vanguard's oldest funds, and RMDs could have something to do with outflows
  • Derf
    If one is thinking of unloading one of the mentioned funds, then also read the link YBB provided.
  • yogibearbullyogibearbull
    edited 9:12AM
    Good points by @InformalEconomist and @Derf.

    But I think that there are other issues too.

    Looking at other allocation funds with MFOP, ABALX / BALFX is doing OK in AUM, but VBINX, FBALX, FPURX are showing similar outflow patterns. An explanation may be that ABALX / BALFX has both advisory and DIY channels, and handholding or marketing by advisory channels may be at work. Other funds are mostly DIY and those investors can be impatient, and sometimes act against their own best interests, as Morningstar Mind-the-Gap studies show.

    BTW, I am a holder of VWELX and VPMAX (along with other PRIMECAP-managed VG funds). I got rid of VWINX years ago.

    One practical implication of heavy outflows is that yearend CG distributions may be high - but mine are in the IRAs. So, the OP wasn't intended to motivate holders to just sell, but to evaluate.
  • racqueteer
    It may also be the recognition that traditional bonds were not behaving well, and this was often what one found in allocation funds. I think many, like me, chose to separate their bond and equity components and work with them separately to get better performance from their portfolios.
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