Vanguard Wellesley

Vanguard Wellesley Income Fund (about 38/62 stocks/bonds)

Wellington Management Company (adviser since the fund's start); offered by Vanguard · 1970-07-01 (fund inception)

Live account on this site. This portfolio is also tracked here with a virtual $100,000 since 21.10.2026. Live account on this site →

Where it stands today

Data through 2026-09. Updated every month.

Since January+3.9 %

Last 12 months+6.5 %

Last 5 years, per year+5.4 %

Now below the peak−2.6 %

Place by 12 months49 / 60

Our calculation, 1926-07 – 2026-09

Per year7.9 %

Real (after inflation)4.8 %

Volatility9.0 %

Worst drop−43.5 %

Worst year−17.7 % (1931)

Best year35.0 %

Worst 12 months−28.8 %

Positive years83 %

40 % of this history is calculated with stand-ins for asset classes that did not exist yet (see “How we model it” and the page about data). Without stand-ins the history starts in 1993.

Growth of $10,000

Vanguard Wellesley: $20,294,044S&P 500: $196,488,890

Where it came from

Vanguard Wellesley Income Fund (VWINX) began operating on 1 July 1970. Wellington Management Company LLP of Boston, a firm founded in 1928 whose flagship was the balanced Wellington Fund, has advised it ever since (Vanguard fact sheet, 30 September 2026; Vanguard investment profile). The fund therefore predates The Vanguard Group itself, which was incorporated only in 1974 after John Bogle was removed as chief executive of Wellington Management. Wellesley became part of the Vanguard family when the funds left Wellington's management company; Wellington Management stayed on as its investment adviser.

The fund was designed as the cautious sibling of the Wellington Fund. Wellington held roughly 60-70 % stocks; Wellesley Income was built around bonds with a minority of high-dividend stocks. Its stated objective today is long-term growth of income, a high and sustainable level of current income, and moderate long-term capital appreciation. I could not find a primary document explaining why Wellington Management launched a second balanced fund in 1970 or who chose the name Wellesley; the sources I read are silent on both points.

The policy is simple and has been steady for decades. The fund puts about 60-65 % of assets in investment-grade corporate, Treasury, agency and mortgage-backed bonds and the remaining 35-40 % in common stocks of companies with above-average dividends or expected rising dividends (fact sheet, 30 September 2026). Its benchmark is the Wellesley Income Composite Index, weighted 65 % bonds and 35 % stocks. For bonds the index was the Lehman Long Credit AA-or-better index until 31 March 2000 and the Bloomberg US Credit A-or-better index afterwards. For stocks the index changed several times: 26 % S&P 500/Barra Value plus 9 % S&P Utilities until mid-1996, then utilities and telephone sub-indexes, and since 1 August 2007 the FTSE High Dividend Yield Index.

Because the bond sleeve is mostly corporate paper (finance, industrial and utility issuers) and the stock sleeve is dividend-focused, the fund behaves like an income-and-quality blend rather than a plain 40/60 index mix. In the 2008 crisis year (fiscal year to 30 September 2008) it fell 6.7 % against 10.6 % for its composite benchmark, 9.5 % for the average mixed-asset conservative fund and 21.2 % for the broad stock market; the bond sleeve was 62 % of assets and the report credits good selection in financials (Vanguard annual report, filed 26 November 2008). That was its first negative fiscal-year return since 1999, according to the same report.

Management today: Loren Moran (adviser to the fund since 2017) and Matthew Hand (since 2021) of Wellington Management (fact sheet, September 2026). Net assets across share classes were about 49 billion dollars on 30 September 2025 (annual report). The fund is actively managed; turnover is about 63 % and the expense ratio of the Investor Shares is 0.22 % (fact sheet).

What is in it

Common stocks of dividend-paying companies (policy range about 35 % to 40 %)	37.5%	Actual 30 Sept 2025: 37.5 % (annual report); 30 Sept 2026: 36.7 % (fact sheet); 30 Sept 2008: about 37.9 % (annual report)
Bonds, mainly investment-grade corporate, plus Treasuries, agencies, mortgage-backed (policy range about 60 % to 65 %)	62.5%	Actual 30 Sept 2025: corporate 43.9, US government and agency 11.9, taxable municipal 3.1, asset-backed/commercial mortgage-backed 1.6, sovereign 0.6, other net 1.4 (annual report). 30 Sept 2026: bonds 62.7, short-term reserves 0.6 (fact sheet)

Source of the shares: Vanguard Wellesley Income Fund fact sheet (30 September 2026) and SEC annual shareholder reports (fiscal years to 30 September 2008 and 2025) — workplace.vanguard.com. Fact sheet strategy text: about 60-65 % in investment-grade corporate, Treasury and agency bonds and mortgage-backed securities, about 35-40 % in dividend-paying stocks. Allocation at 30 Sept 2026: bonds 62.7 %, stocks 36.7 %, short-term reserves 0.6 %. Bond issuers (share of bond part): finance 28.5, industrial 26.4, Treasury/agency 22.7, utilities 9.2, other 7.7, government mortgage-backed 3.3, foreign 1.3, asset-backed 0.6, commercial mortgage-backed 0.4. Stock sectors: financials 19.4, information technology 17.7, health care 16.1, industrials 12.2, consumer staples 8.2, energy 7.7, utilities 5.9, real estate 4.0. Benchmark: Wellesley Income Composite Index, 65 % bonds / 35 % stocks. The prospectus was not opened; the ranges are as printed on the fact sheet. Fund-level net assets in the annual report are for all share classes; the fact-sheet figure of 6.9 billion dollars is for Investor Shares only.

How we model it

Corporate bonds	44%
US large companies (S&P 500)	20%
US bond market (aggregate)	19%
US large value stocks	17%

Stocks (37 %): the fund's benchmark is a high-dividend-yield index and the portfolio is value and dividend oriented, but the 2026 sector mix (17.7 % information technology) shows it is not a pure deep-value book, so I split the stock part between us_large (0.20) and us_large_value (0.17). Note that our us_large_value series is the Fama-French big-value portfolio, which is more extreme than a dividend-yield index. Bonds (63 %): corporate bonds were 43.9 % of net assets at 30 Sept 2025 and about 70 % of the bond part, so bond_corp gets 0.44; Treasuries, agencies (11.9 %), taxable municipals, mortgage- and asset-backed and sovereign paper (together about 5 %) plus the small cash balance are mapped to bond_agg (0.19) as the nearest broad series. I rounded stocks to 37 % (actual 36.7-37.9 %) and bonds to 63 % so the weights sum to 1; the policy centre is about 37.5/62.5. Data limit: bond_corp starts in 1993-11 and bond_agg in 1987-01, so a backtest of this mapping can only begin in late 1993; the real fund's history from 1970 cannot be reproduced with our series. Average bond quality was Aa3 with duration of about 5.8 years in 2008 (annual report), more credit-heavy than the aggregate index.

For a euro investor

The same portfolio bought with euros, without currency hedging: monthly returns converted at the end-of-month rate (German mark before 1999), inflation of the euro area. History in euros from 1953-10 to 2026-09.

Per year in euros7.3 %

After euro inflation4.5 %

Worst drop in euros−33.2 %

Worst year in euros−19.2 % (1987)

Safe withdrawal, 30 years, dollars4.10 % (1966-02)

Safe withdrawal, 30 years, euros3.06 % (1968-12)

The largest first-year withdrawal, then growing with inflation, that lasted 30 years from every monthly start. Test withdrawals for this portfolio →

How to build it with European funds

Examples of UCITS funds sold in the EU for each part of the portfolio. They track similar markets, not exactly the indices of our calculation.

Part	Share	Example funds (ISIN)
Corporate bonds	44%	iShares USD Corporate Bond UCITS ETF (Dist) `IE0032895942`
US large companies (S&P 500)	20%	iShares Core S&P 500 UCITS ETF USD (Acc) `IE00B5BMR087` Vanguard S&P 500 UCITS ETF (USD) Distributing `IE00B3XXRP09`
US bond market (aggregate) (closest match)	19%	iShares Core Global Aggregate Bond UCITS ETF EUR Hedged (Acc) `IE00BDBRDM35` iShares Core Global Aggregate Bond UCITS ETF USD (Dist) `IE00B3F81409`
US large value stocks	17%	iShares Edge MSCI USA Value Factor UCITS ETF `IE00BD1F4M44`

These are examples, not recommendations. Check the fund's key information document, costs and taxes with your broker before buying. Names and ISINs checked on justETF on 4 November 2026; Udak receives nothing from these funds.

The idea

Give investors a steady, rising stream of income with limited volatility: most of the money goes into high-quality bonds for income and stability, and a minority into stocks of firms with above-average or growing dividends to add growth and some inflation protection. The idea is that dividend payers tend to hold up better in downturns than the broad market.

How people buy it

The fund itself: Vanguard Wellesley Income Fund (Investor Shares VWINX, Admiral Shares VWIAX), actively managed by Wellington Management. There is no index version. A do-it-yourself substitute is roughly 37 % in a high-dividend or value stock fund (for example a high-dividend-yield index fund) and 63 % in an intermediate investment-grade corporate bond fund or a mix of corporate and aggregate bond funds. Vanguard's LifeStrategy Conservative Growth and Income Fund and Target Retirement Income Fund are index-based balanced alternatives with a similar risk level.

Rebalancing as published

No fixed calendar rule. The adviser keeps the fund inside about 60-65 % bonds and 35-40 % stocks, so the mix is managed within a band, not periodically reset to exact weights.

Variants

Wellington Fund (sister fund): about 65 % stocks and 35 % bonds; see m_wellington.
Vanguard LifeStrategy Conservative Growth (40 % stocks / 60 % bonds) and Income (20/80) as index-based alternatives; see m_vg_conservative.
Pure-index 35/65 variant: 35 % us_large_value (or us_large) and 65 % bond_corp; close to the fund's own 65/35 composite benchmark.

Criticism

Active management: expense ratio 0.22 % and turnover about 63 %, higher than the cost of a pure index mix, although low for an active fund.
Heavy in corporate bonds, so in a credit crisis it is more exposed than an aggregate-bond mix; the 2008 report shows 28 % of the bond part in financial issuers, and the fund's 2008 loss was helped by selection among financial stocks, a decision that could have gone the other way.
Dividend and value tilt can lag when growth stocks lead: the fund returned 5.33 % a year over ten years to September 2026, only a little ahead of its 5.07 % benchmark, and far below a stock-heavy portfolio.
Interest-rate risk: with average duration near 6 years in 2008 (the current figure was not found), the bond sleeve fell with rising rates in 2022 (fund -9.05 % for the calendar year).
Bond history is short in our data; as a long-run record the fund's own results since 1970 are not reproducible from index series.

Through the eras

Era	Dates	Total	Per year	Worst drop	S&P 500
Roaring Twenties boom	1926-07 – 1929-08	+53.9 %	+14.6 %	−2.1 %	+153.7 %
Wall Street crash and Great Contraction	1929-09 – 1932-07	−35.3 %	−13.9 %	−43.5 %	−78.2 %
New Deal recovery	1932-08 – 1937-02	+103.1 %	+16.7 %	−15.5 %	+268.7 %
Recession within the Depression	1937-03 – 1938-03	−21.3 %	−19.9 %	−22.3 %	−49.5 %
Rearmament and World War II	1938-04 – 1945-09	+90.7 %	+9.0 %	−9.1 %	+205.8 %
Postwar expansion	1945-10 – 1965-12	+330.9 %	+7.5 %	−9.4 %	+1212.9 %
Golden age of the 1950s	1950-01 – 1959-12	+132.1 %	+8.8 %	−7.6 %	+438.8 %
Go-go years and nifty-fifty	1966-01 – 1968-12	+18.5 %	+5.8 %	−7.6 %	+34.0 %
The Great Inflation (stagflation)	1969-01 – 1982-07	+123.8 %	+6.1 %	−14.6 %	+84.6 %
1973-74 oil shock and bear market	1973-01 – 1974-12	−9.3 %	−4.7 %	−14.6 %	−41.7 %
Second oil shock and the Volcker disinflation	1979-01 – 1982-08	+40.6 %	+9.7 %	−10.9 %	+59.2 %
Great bull market in stocks and bonds	1982-08 – 1999-12	+932.6 %	+14.3 %	−11.4 %	+2060.4 %
Black Monday	1987-08 – 1987-12	−7.7 %	—	−11.4 %	−21.8 %
Savings-and-loan crisis and 1990 recession	1990-07 – 1991-03	+8.2 %	—	−6.2 %	+7.4 %
1994 bond market massacre	1994-02 – 1994-12	−5.9 %	—	−7.1 %	−3.2 %
Asian and Russian financial crises	1997-07 – 1998-10	+19.1 %	+14.0 %	−5.9 %	+22.4 %
Dot-com bubble and crash	2000-03 – 2002-10	+10.4 %	+3.8 %	−7.7 %	−37.2 %
Recovery and housing boom	2002-11 – 2007-09	+54.9 %	+9.3 %	−3.2 %	+97.0 %
Global financial crisis	2007-10 – 2009-03	−19.6 %	−13.6 %	−23.6 %	−44.7 %
The decade after the crisis	2009-04 – 2019-12	+172.8 %	+9.8 %	−6.3 %	+411.2 %
Fourth-quarter 2018 sell-off	2018-09 – 2018-12	−5.9 %	—	−5.9 %	−14.4 %
Covid crash and stimulus boom	2020-02 – 2021-12	+20.5 %	+10.2 %	−11.9 %	+53.6 %
Inflation shock and rate hikes	2022-01 – 2022-12	−13.6 %	−13.6 %	−18.6 %	−19.9 %

Calendar years

Any N-year period

Any N-year period	Worst	10 % worse than	Median	10 % better than	Best
1 y (1192)	−28.8 %	−3.1 %	+8.5 %	+20.1 %	+67.0 %
3 y (1168)	−15.4 %	+1.9 %	+7.6 %	+14.3 %	+25.2 %
5 y (1144)	−5.0 %	+3.7 %	+7.3 %	+13.1 %	+23.7 %
10 y (1084)	+1.8 %	+5.3 %	+7.4 %	+13.1 %	+16.5 %
15 y (1024)	+3.5 %	+5.8 %	+7.5 %	+12.6 %	+15.2 %
20 y (964)	+4.1 %	+6.2 %	+7.7 %	+12.1 %	+14.0 %
30 y (844)	+5.8 %	+6.7 %	+8.4 %	+10.9 %	+11.9 %

How it behaved in history

1970 (start). The fund began on 1 July 1970 under Wellington Management as the income-oriented, bond-heavy sibling of the Wellington Fund. I found no primary source for its first-year allocation or return. institutional.vanguard.com
1973-1974 and 1966-1982 (stagflation). Not verified: I found no primary document with the fund's returns for 1973-74 or for the 1970s inflation decade. Bond yields rose through 1981 and bond prices fell, so a bond-heavy portfolio was under pressure in real terms, but this is an inference about the base assets, not a published fund result. workplace.vanguard.com
2000-2002. The 2008 report says the fiscal year to September 2008 was the first negative year since 1999, meaning the fund had positive fiscal-year returns in 2000-2002 while the stock market fell. The exact figures were not retrieved. www.sec.gov
2008. Fiscal year to 30 September 2008: -6.7 % against -10.6 % for the composite benchmark; bonds were 62 % of assets and stocks about 38 %. The report credits the high-quality bond sleeve and selection within the financial sector. www.sec.gov
2022. Calendar 2022: -9.05 % for the fund against -9.60 % for the benchmark, a year when both stocks and bonds fell. workplace.vanguard.com
2023-2026. Calendar 2023 +7.00 %, 2024 +5.92 %, 2025 +10.98 %; year to 30 Sept 2026 +0.53 % with the third quarter -2.65 %. workplace.vanguard.com

Published results (by others)

Fiscal year to 30 September 2008: fund -6.7 % vs composite benchmark -10.6 %, average mixed-asset conservative fund -9.5 %, broad stock market -21.2 % (Oct 2007 - Sep 2008): -6.7 % vs -10.6 % www.sec.gov
Calendar-year returns 2016-2025 (fund vs benchmark) (2016-2025): 8.08, 10.20, -2.57, 16.39, 8.45, 8.50, -9.05, 7.00, 5.92, 10.98 % vs 8.44, 9.06, -2.79, 16.08, 7.02, 7.55, -9.60, 7.10, 6.99, 10.37 % workplace.vanguard.com
Average annual returns to 30 Sept 2026: one year 2.47 % (benchmark 2.80 %), three years 8.44 % (8.98 %), five years 3.45 % (3.67 %), ten years 5.33 % (5.07 %) (to 2026-09-30): 10-year 5.33 % vs 5.07 % workplace.vanguard.com
Fiscal year to 30 Sept 2025: Investor Shares 6.11 % vs benchmark 6.62 %; five years 5.16 % vs 5.14 %; ten years 6.23 % vs 5.91 %; Bloomberg US Aggregate 2.88 / -0.45 / 1.84 %; total US stock market 17.46 / 15.69 / 14.64 % (to 2025-09-30): 6.11 % (1y), 5.16 % (5y), 6.23 % (10y) www.sec.gov
Portfolio composition as % of net assets at 30 Sept 2025 (2025-09-30): common stocks 37.5, corporate bonds 43.9, US government and agency 11.9, taxable municipal 3.1, ABS/CMBS 1.6, sovereign 0.6, other net 1.4 www.sec.gov

What we could not verify

Why and by whom the fund was launched in 1970 and why it is called Wellesley: no primary source found.
Allocation history before 2008: only the benchmark weights (65 % bonds / 35 % stocks) and the 2008 report (62 % bonds) were checked; the 1970s-1990s actual stock/bond split was not verified.
Fund returns for 1970-1999 (including 1973-74 and 2000-02) were not retrieved; only the 2008 fiscal year, 2016-2025 calendar years and recent averages are sourced.
A secondary comment says Wellesley's 1970 expense ratio was 1.34 % against 0.47 % for Wellington and that a sales load applied; I could not confirm it from a primary source and did not use it as evidence.
The prospectus was not opened; the 60-65 % and 35-40 % ranges are from the fact sheet. The Vanguard fact sheet in my fetch was decoded from a PDF, so small digits should be double-checked against the PDF.
Current bond duration and credit-quality statistics were not found (2008 values only: duration 5.8 years, average quality Aa3).
The mapping to us_large_value and bond_corp is approximate: our value series is the Fama-French big-value portfolio, not a dividend-yield index.

Sources

workplace.vanguard.com https://workplace.vanguard.com/assets/corp/fund_communications/pdf_publish/us-products/fact-sheet/F0027.pdf
institutional.vanguard.com https://institutional.vanguard.com/assets/corp/fund_communications/pdf_publish/us-products/investment-profiles/0027.pdf
www.sec.gov https://www.sec.gov/Archives/edgar/data/105544/000093247108001984/wellesleyfinal.htm
www.sec.gov https://www.sec.gov/Archives/edgar/data/105544/000110465925116910/tm2527480d2_ncsr.htm
en.wikipedia.org https://en.wikipedia.org/wiki/Wellington_Management_Company
en.wikipedia.org https://en.wikipedia.org/wiki/John_C._Bogle

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Calculated on historical data. Past results do not predict the future. Models before the 1990s use stand-ins for classes that had no index yet; fees, taxes and fund costs are not included. This is mathematics, not an investment recommendation.