Vanguard Global Wellesley Income Fund Admiral Shares VGYAX

Experienced managers with deep resources and an approach grounded in robust bottom-up research help distinguish Vanguard Global Wellesley Income as one of the best in its peer group, supporting dual pillar upgrades. Its People Pillar rating rises to Above Average from Average, while the Process Pillar rises to High from Above Average.

Lead managers Andre Desautels and Loren Moran execute this fund’s disciplined approach across the equity and fixed-income sleeves. Desautels joined Wellington in 2006, spending 13 years on the firm’s well-regarded global industry analyst team before replacing Ian Link as the equity manager here in 2019. He lacks dedicated resources but effectively collaborates with his former team and other Wellington equity teams. Moran joined the firm and the team in 2014, has comanaged the fund since its 2017 inception, and took charge of the bond sleeve in 2021 following a multiyear transition that saw seasoned managers retire in 2019 and 2021. The fund remains on solid ground with the duo in charge, and they have built a fine track record over their shared tenure as leads.

Moran and Desautels oversee the fund’s 35% equity/65% fixed-income strategic allocations, which can shift up or down by up to 5 percentage points, but they have kept them within 3 percentage points over their shared tenure as leads. Short-term asset-class calls can be difficult to consistently get right, so maintaining a disciplined allocation lets the team’s security-selection skill drive results, which should continue to benefit fundholders.

Desautels runs a high-conviction equity portfolio that typically holds 40-60 stocks, focusing on companies with reliable cash flows that can maintain and grow their dividends. Companies with the highest dividends tend to be riskier, so he generally avoids them, instead preferring companies with a better risk/reward trade-off. Current and potential portfolio companies are evaluated based on quality, risk, and valuation metrics, while a distinctive proprietary scorecard helps ensure repeatability.

The fixed-income team invests across global bond markets to build a portfolio with three goals: act as ballast to the equity sleeve, produce income, and provide liquidity. The team emphasizes corporate credit, which typically soaks up 60% of the sleeve. Diligent bottom-up research has historically led the team to stable issuers with solid fundamentals. Outside of corporate credit, asset-backed securities and taxable municipal bonds generally account for around 20% of the bond portfolio, with the remainder in US Treasuries and agency securities.

Consistent, disciplined execution of this fund’s approach strengthens conviction and underpins a Process Pillar rating upgrade to High from Above Average.

Disciplined top-down management and well-defined approaches across equity and fixed-income anchor the strategy. Lead managers Andre Desautels and Loren Moran maintain allocations near the fund’s 35% equity/65% fixed-income targets despite 5 percentage points of flexibility in either direction; equity exposure has ranged between 35% and 38% over their shared tenure as leads. Avoiding large asset-class bets allows the team’s strength in bottom-up security selection to drive returns.

Desautels seeks to hold companies with high returns on invested capital, strong free cash flow, and disciplined capital allocation in the equity sleeve. He favors firms willing and able to pay reliable dividends but generally stays clear of the highest yielders, which tend to be riskier. A distinctive proprietary scorecard helps quantify fundamental insights, playing a key role in idea generation and portfolio construction while bringing structure to the approach.

The bond team runs a flexible, globally diversified portfolio, typically investing around 60% in corporate debt, 20% in taxable municipal bonds and asset-backed securities, and the remainder in Treasuries and agency securities for liquidity management. It is credit-heavy but composed entirely of investment-grade fare. The bond team’s in-depth research on individual issuers informs security selection and sector allocations, while duration positioning reflects macro views.

An emphasis on quality, dividend-paying companies with modest valuations pushes the equity sleeve toward value stocks. The sleeve’s 39% exposure to large stocks stood above the global moderately conservative-allocation Morningstar Category median of 30% as of March 2026. Financials tends to be the largest sector exposure in the portfolio; it occupied 30% of the sleeve, around 14 percentage points higher than the peer median. Andre Desautels has found value in non-US financial institutions, like FinecoBank and Royal Bank of Canada. The sleeve also stands out for a continued overweighting in utilities, with its 9% weight tripling the category median.

The fixed-income portfolio reflects its global opportunity set, typically investing between 30% and 40% in non-US bonds. Its 56% weighting in corporate credit as of March 2026 stands out compared with the category median of 38%. Though it’s all investment-grade, this fund takes on more credit risk than Vanguard Wellesley, allocating around 32% of the sleeve to BBB rated issues versus 15% in its sibling fund. The team has found value in global BBB rated bonds and sees them as an important diversifier. Duration has historically been higher than the category median; it was 5.9 years versus the median peer’s 5.0 years as of March 2026, but the team generally keeps it within a year of its custom benchmark.

Two adept managers with a growing track record supported by Wellington’s deep bench of analysts set this strategy apart, driving a People Pillar rating upgrade to Above Average from Average.

Lead equity manager Andre Desautels took over the equity sleeve in August 2019 after the unexpected departure of Ian Link. Desautels spent 13 years on the firm’s global industry analyst team covering various sectors, including financials and communications. While his elevation to manager was relatively quick, given the sudden departure of Link, he has proven capable and has built a solid track record here. Desautels lacks dedicated resources but is far from isolated. He works closely with other portfolio manager teams and leverages the nearly 60-person global industry analyst team. Key-person risk remains, but the firm’s bench strength helps reduce concerns.

On the bond side, portfolio manager Loren Moran joined the team in 2014, ascended to portfolio manager in 2017, and became sole manager of the fixed-income sleeve in July 2021 after comanager Michael Stack retired. Portfolio manager Rachel Chong, who isn’t a named manager on this fund, supports Moran. Chong joined in 2025 from Wellington’s global credit team and replaced Noah Atlas, who moved to a different team at the firm. As Atlas did, Chong works closely with Moran on investment-grade credit selection. Another team member, Lei Zhu, left the firm in 2025 after only joining in early 2024. While this turnover isn’t ideal, the team is still on a strong footing under Moran’s leadership.

Vanguard maintains its High Parent Pillar rating as it continues to grow under new leadership.

CEO Salim Ramji has had a busy first year captaining Vanguard’s crew, and the ship remains pointed in the right direction. The firm made its largest round of fee cuts in early 2025, which came at an estimated cost of USD 350 million. It established a separate division dedicated to its advice and wealth management efforts, a sign that it wants to seriously compete within those lines of business. Asset growth has continued to be a huge success. Only BlackRock’s inflows rival the money Vanguard is taking in. Likewise, the number of clients it serves has more than doubled since 2015.

Despite that success, an ever-growing number of clients has presented a challenge: Vanguard can’t grow its services fast enough to keep up with demand. In some instances, it has had to curb certain services and capabilities or raise fees on others to cope, causing some loyal clients to criticize what they perceive as deteriorating services.

Vanguard has ambitions to bring its disruptive legacy to the bond market. It created roughly a dozen low-cost bond exchange-traded funds for US investors and several others abroad over the 12 months through June 2025. All have low fees in their respective categories, and the actively managed strategies align with Vanguard’s philosophy. They are relatively easy to understand and are conservatively managed.

Vanguard has another opportunity to prove that clients are still its priority. On the surface, its endeavor into the high-fee deal-making world of private assets alongside Wellington and Blackstone looks like a cultural mismatch. So far, the collaboration hasn’t produced anything that’s concerning.

The lead managers hold a strong track record over their shared tenure. Since bond manager Loren Moran ascended to lead in July 2021 through April 2026, the admiral share class’ 5.1% annualized return topped the global moderately conservative category median of 4.0% and the Morningstar Moderate Conservative Target Risk Index’s 3.9%. Lower volatility, measured by standard deviation, contributed to excellent risk-adjusted results. The fund’s Sharpe ratio, a measure of risk-adjusted return, topped 91% of peers over the period. The fund has produced an average 12-month yield of 2.7% since its 2017 inception, in line with the typical category rival.

The fund stands out for its defensive qualities, leading to resilience during market stress periods. For example, during 2022’s broad market downturn, it sank 8.1%, shallower than the peer median and category benchmark by 5.6 and 5.8 percentage points, respectively. The equity sleeve’s tilt toward value stocks helped, while growth stocks sold off more sharply. Focus on quality issuers in the bond sleeve and allocations to defensive sectors also helped weather the storm. The fund lagged through growth-led markets in 2023 and 2024 but rebounded in 2025. Shrewd security selection and a tilt toward non-US stocks supported performance, with non-US stocks outpacing US stocks and a weakening US dollar providing tailwinds. The fund’s 13.3% return for the year beat 78.0% of peers.

Vanguard Global Wellesley Income Admiral's Prospectus Adjusted Expense Ratio is 0.3% per year. It places it in the cheapest quintile of the Morningstar US Fund Global Moderately Conservative Allocation Category, where the median fee is 0.87% per year. This cost positioning translates into a Medalist Rating Price Score of 2.26, which reflects its relative price positioning within the category. The Price Score ranges from -2.50 (most expensive) to +2.50 (cheapest), with higher scores indicating better cost competitiveness.