My first recommendation — the Vanguard Wellington Fund (VWELX) — is a grandaddy of the mutual fund industry. At 84 years old, Wellington is the nation’s oldest balanced fund.
Morningstar gives Wellington a five-star “gold” rating, and that’s because of its consistent performance. VWELX is up almost 12% so far in 2013, and it has had only one negative year in the past 2011 — that was in 2008, when Wellington lost 22.3%. (But the S&P 500 lost 37%.) During the past 15 years, VWELX has achieved an annualized total return of 7.7%, which is 210 basis points higher than the index.
It’s important to understand that as a balanced fund, Wellington has a bond component that has played havoc with its performance in recent years. Not to worry, though — VWELX’s 103 stock holdings still represent 64% of its $75.1 billion portfolio. The fund’s top 10 holdings represent 15% of the overall portfolio, and are led by Wells Fargo (WFC) at 2.2%, followed by Exxon Mobil (XOM), JPMorgan (JPM), Merck (MRK) and Microsoft (MSFT).
Meanwhile, Wellington’s management fees are unsurprisingly low — as is Vanguard’s way — at just 0.25%, which is about 75% lower than other similar funds.
Vanguard’s reputation is hard to beat, as is Wellington’s performance. If you’re looking for something tried and true, this mutual fund is it.