Balanced yet cautious Vanguard Wellington Fund with a tech and North America focus

Report created on Aug 1, 2025

Risk profile Info

3/7
Cautious
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Diversification profile Info

3/5
Moderately Diversified
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Positions

The Vanguard Wellington Fund Investor Shares is a singular investment choice, representing 100% of the portfolio. It's a balanced fund, with a 65% allocation in stocks and 34% in bonds, demonstrating a cautious approach to risk. This moderate diversification is reflected in its diversification score of 3 out of 5. The fund's technology sector weighting at 29% suggests a tilt towards growth-oriented investments, while its significant bond component aims to provide stability.

Growth Info

Historically, the fund has achieved a Compound Annual Growth Rate (CAGR) of 5.13%, with a maximum drawdown of -25.90%. Notably, a small number of days (13) contributed to 90% of its returns, indicating that timing in the market has been a critical factor in its performance. This historical data underscores the fund's ability to generate steady returns over time, although it also highlights the impact of market volatility on its performance.

Projection Info

Monte Carlo simulations, using 1,000 iterations, project a median return of 85.9% with a 5th percentile outcome of -15.5%, suggesting a wide range of potential outcomes. This analysis, while based on historical data, offers a glimpse into the fund's risk and return profile, indicating a reasonable expectation of positive returns but also underscoring the inherent uncertainties in market-based investments.

Asset classes Info

  • Stocks
    65%
  • Bonds
    34%
  • Cash
    1%

The fund's asset allocation is strategically split between stocks (65%) and bonds (34%), with a minimal cash position. This mix aligns with the fund's cautious profile, aiming to balance growth through equities with the stability of fixed income. Such a composition is suitable for investors seeking moderate growth while minimizing volatility, a strategy that can be particularly appealing during uncertain market conditions.

Sectors Info

  • Technology
    29%
  • Financials
    15%
  • Consumer Discretionary
    12%
  • Health Care
    11%
  • Telecommunications
    9%
  • Industrials
    6%
  • Consumer Staples
    5%
  • Energy
    5%
  • Utilities
    3%
  • Real Estate
    2%
  • Basic Materials
    1%

Sector allocation within the fund is broad, covering technology, financial services, consumer cyclicals, healthcare, and more. The heavy emphasis on technology (29%) positions the fund to capitalize on growth opportunities in this dynamic sector. However, this concentration also exposes the fund to sector-specific risks, such as regulatory changes or market sentiment shifts. Diversifying across sectors can mitigate these risks while still allowing for targeted growth.

Regions Info

  • North America
    94%
  • Europe Developed
    6%

Geographic allocation is heavily skewed towards North America (94%), with a small exposure to developed European markets (6%). This concentration in North American assets reflects a preference for the stability and growth potential of the US market. However, limited exposure to international markets may restrict diversification benefits and opportunities for global growth, suggesting a potential area for enhancement.

Market capitalization Info

  • Mega-cap
    30%
  • Large-cap
    29%
  • Mid-cap
    6%

The fund's market capitalization exposure is predominantly in mega (30%) and big (29%) cap stocks, with a minor allocation to medium caps (6%). This focus on larger companies is consistent with the fund's cautious risk profile, as these entities typically offer more stability and less volatility than their smaller counterparts. However, the limited exposure to medium-sized companies could mean missing out on higher growth potential these firms might offer.

Dividends Info

  • VANGUARD WELLINGTON FUND INVESTOR SHARES 1.60%
  • Weighted yield (per year) 1.60%

The fund's dividend yield of 1.60% contributes to its total return, providing a steady income stream in addition to potential capital appreciation. For investors seeking both growth and income, this yield is an attractive feature, although it's essential to balance the desire for dividends with the overall investment strategy and risk tolerance.

Ongoing product costs Info

  • VANGUARD WELLINGTON FUND INVESTOR SHARES 0.25%
  • Weighted costs total (per year) 0.25%

With a total expense ratio (TER) of 0.25%, the fund demonstrates cost efficiency, which is crucial for long-term investment success. Lower costs directly translate to higher net returns for investors, making this fund an attractive option for those mindful of fees. It's important for investors to continuously monitor costs, as they can erode investment returns over time.

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