On October 18, 2017, we launched 2 new funds—Vanguard Global Wellington™ Fund and Vanguard Global Wellesley® Income Fund—each of which combines balanced, active, and global investing into a single all-in-one package.
The difference between these 2 funds? How each prioritizes growth versus income.
Both funds build on the time-tested design of our existing Wellington and Wellesley Income Funds—both of which are actively managed balanced funds—by adding global diversification.
Growth & income
|Each fund offers the potential for long-term growth and regular income by investing in both stocks and bonds in varying degrees.|
This balanced approach also relies on bonds to help offset some of the risk associated with investing in stocks.
Each fund attempts to beat the returns of its benchmark by leveraging the experience and expertise of a professional fund manager. Active managers hand-select the stocks and bonds they think could achieve higher returns (versus simply tracking the benchmark).
We selected Wellington Management for this task to tap into its 30+ years of experience investing across global markets.
Each fund offers even more diversification by taking advantage of opportunities across U.S. and international markets. This eliminates “home bias” and avoids the risk that comes with focusing on a single geographic region.
Now that global markets have matured and the cost of international investing has come down, there’s never been a better time to take advantage of new opportunities around the world.
Prioritizing growth vs. income
The Global Wellington Fund takes a slightly more aggressive approach by emphasizing long-term growth.
It does this by investing about two-thirds of its portfolio in stocks, with the remaining third invested in bonds to provide a moderate level of income.
Meanwhile, the Global Wellesley Income Fund takes a slightly more conservative stance by aiming for high, sustainable income.
It does this by investing about two-thirds of its portfolio in bonds, with the remaining third invested in stocks to provide a moderate level of long-term growth.
A few extra details
Both funds are available in Investor Shares (at a $3,000 minimum) and Admiral™ Shares (at a $50,000 minimum) with the low costs you’ve come to expect from Vanguard.
Estimated fund expense ratio
Industry average expense ratio*
Cost savings for you
From October 18 through November 1, 2017, both funds are in a subscription period. During that time, all Investor Shares are available for $20 per share, and all Admiral Shares are available for $25 per share. In addition, all of the money in both funds is held temporarily in money market investments.
Starting on November 2, the funds will use the money gathered during the subscription period to begin investing in stocks and bonds according to their respective target allocations. At that time, you can expect to see share prices begin to fluctuate based on how each fund’s underlying investments are performing.
Vanguard & Wellington Management together again
Vanguard and Wellington Management have a long and successful history—in partnership and individually. In fact, Wellington Management has been managing Vanguard Wellington Fund (Vanguard’s first mutual fund) since its inception in 1929 and Vanguard Wellesley Income Fund since its inception in 1970.
Vanguard’s history with active fund management
Vanguard is often recognized for its index funds. But it may surprise you to learn that we also have more than $1.1 trillion under management in actively managed funds, representing about 28% of our total assets** and making us the third-largest provider of active funds.†
We believe our success with active fund management stems from a powerful combination of:
- Talent. Through a Vanguard fund, you gain access to premier fund managers—like Wellington Management—without needing to invest millions of dollars. Thanks to our size and reputation, we’re able to scour the globe on your behalf in search of the best external management companies. We partner with those we believe can offer a layer of expertise that complements that of our internal fund managers.
- Low costs. You also gain access to those managers without paying exorbitant fees. Instead of allowing external management companies to dictate fees, we leverage our size and scale to strategically negotiate attractive fee arrangements. To ensure that our outside managers’ interests are aligned with yours, we reward managers with higher fees for outperformance and penalize them with lower fees for underperformance.
- Long-term perspective. Knowing that success should never be measured in days, weeks, or months, we approach each partnership with a longer-term lens. The average tenure for all of our external fund managers is about 14 years, giving us time to build deep relationships with each firm.
Wellington Management’s experience & global expertise
Wellington Management has been successfully investing in global markets since it opened its first international office in London in 1983. Today, the company has 13 offices around the world, employs more than 650 investment professionals who average 17 years of experience, and serves clients in more than 65 countries. The new funds leverage the same experienced investment team and time-tested philosophy that has served Wellington and Wellesley Income shareholders well for many years.
Meet one of the new fund managers
Hear more about the thinking behind these 2 new funds from Nataliya Kofman, managing director at Wellington Management. Nataliya manages the stock portion of Vanguard Global Wellington Fund.
*Source: Lipper, a Thomson Reuters Company, as of December 31, 2016.
**Source: Vanguard, as of July 31, 2017.
†Source: Morningstar, as of December 31, 2016.
All investing is subject to risk, including the possible loss of the money you invest. Diversification does not ensure a profit or protect against a loss.
Investments in stocks and bonds issued by non-U.S. companies are subject to risks including country/regional risk, which is the chance that political upheaval, financial troubles, or natural disasters will adversely affect the value of securities issued by companies in foreign countries or regions; and currency risk, which is the chance that the value of a foreign investment, measured in U.S. dollars, will decrease because of unfavorable changes in currency exchange rates.