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Vanguard Wellesley Income Fund (VWINX).
Minimum investment $3000 for Investor shares (0.23% ER)
$50,000 for Admiral Shares (VWIAX 0.16% ER)
This 40 year-old, income-oriented balanced fund offers exposure to stocks and investment-grade bonds. Balanced funds typically offer a higher allocation to stocks; however, this fund is unique in allocating about one-third to stocks and two-thirds to bonds. The fund’s stock holdings are focused on companies that have historically paid a larger-than-average dividend or that have expectations of increasing dividends. This focus may provide a higher quarterly income distribution than non-income-focused balanced funds. Investors with a medium- or long-term time horizon who have a goal of steady income and who are willing to accept modest movement in share price may wish to consider this fund as a core holding in their portfolio.
And if you want to flip the portfolio allocation to 65% Stocks, 35% Bonds, my favorite is its cousin, Vanguard Wellington.
As a former member of the board of the Sequoia Fund, I am less than objective on the question of ‘what is your favorite mutual fund.’. Nonetheless, Sequoia it is. During the two-three years prior to 2016, the fund built up a outsized position in Valeant—it may have been 30% of the fund—and after making manager changes, the position was sold in the 2nd quarter of 2016. Today the five member investment committee adheres to a diversified approach—the fund holds around twenty-five positions—and holds steady to a philosophy of buying advantaged businesses that can be expected to have nice increases in intrinsic value over the years. Investment results since changes were put in place 2nd quarter of 2016 are returns slightly ahead of the S&P 500. This performance should continue for a long time.
The first mutual fund I ever purchased was the Dodge and Cox Balanced fund. I have owned it since 1997. Dodge and Cox are value investors and the fund holds about 80-90 stocks in the portfolio in a 60/40 split with bonds. My description of the company and the funds is that they are steady and reliable.
Polen Capital, Growth Fund… after fees and taxes it’s constantly beat the S&P 500 over a decade. Only drawback is 1M min. I have been very pleased with the returns.
My largest actively managed holding is Fidelity Total Bond (FTBFX). Classified as intermediate core-plus and gold-rated by Morningstar, it invests mostly in the usual investment grade credit, but can go up to 20% in high yield and emerging markets combined. I feel like it gets a little more juice than a bond market index without too much more risk, and has below average fees.
The line between active and passive continues to blur. I have some money in very low-cost factor funds. (Such as the Vanguard Momentum (VFMO) and Vanguard Liquidity (VFLQ).) Basically, any “active” fund which is run by a computer algo (rather than a human) is preferred.
Now, there is some evidence that an active manager can do ok so long as the fees are very low. Look to Emerging Markets as an example. Some studies even show is the cost of the fund, not whether it’s active or passive, that really makes the return difference. So you could hypothetically fill your portfolio with active funds (at low cost) and still keep up well.
Most of my funds are passive and over a broad index, but I have a few active ones too. The most favorite one is Cohen & Steers Total Return Realty Fund RFI. I also own it’s leveraged cousin RQI, but I’m unsure that the increased volatility (due to the leverage) is worthwhile. Both funds have delivered the promised monthly payments so far and have beaten my passive REIT fund – VNQ – since the time of purchase.