Mutual Funds Spotlight – Vanguard Wellington Fund

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The Vanguard Wellington Fund (MUTF: VWELX ) is one of the biggest mutual funds from one of the biggest names in 401k investing. Founded in 1929, the Wellington Fund was the first balanced mutual fund in the U.S. and one of the oldest surviving funds. Vanguard Wellington invests primarily in dividend paying stocks, undervalued stocks and to a lesser extent, fixed income securities such as corporate bonds, government bonds and treasuries and mortgage backed securities. It is well suited for retirees and investors who are looking for a source of income without having to sell their investment holdings. Here are the specifics for the Vanguard Wellington n Fund for today's mutual funds spotlight: Investing Strategy : 60% to 70% of the fund's cash is invested in dividend-paying stocks, and 30% to 40% will be put in fixed income assets. The current allocation is 66% stocks, 28% bonds, and 6 % cash. Expense Ratio: At 0.30%, the expense ratio for the Vanguard Wellington Investor Class Fund is extremely cheap. There is, however, a transaction fee of $75. Top 5 Holdings: The top stocks in the Vanguard Wellington Class Fund include telecommunications giant AT&T, Inc. (NYSE: T ) at 2.40%, oil mega-caps ExxonMobil Corporation (NYSE: XOM ) at 2.33% and  Chevron Corporation (NYSE: CVX ) at 1.96%, information technologies powerhouse International Business Machines Corp (NYSE: IBM ) at 1.90% and financial services giant Wells Fargo Company (NYSE: WFC ) at 1.86%. Returns: Wellington has slightly lagged the market recently. The one-year return of the fund is about 11% compared with 16.5%2 returns for the S&P 500 in the last 12 months. Its five-year return of 4.1% is on par with the S&P 500's 4.5% return, but lower than the Dow Jones Industrial Average's 11.6%. Other Fund Statistics Net Asset Value: $56.8 billion Minimum Investment: $10,000 for an IRA Fund managers: Edward Bousa and John Keogh Managers' Tenure: Since December 2000 and December 2003, respectively