A low-cost ETF mix can outperform Vanguard Wellesley Income Fund for retirees seeking income and stability.

The Vanguard Wellesley Income Fund (VWINX) is a conservative, income-focused mutual fund with a 9.17% annualized return since 1970, allocating about one-third to dividend-growth stocks and two-thirds to investment-grade bonds. However, a portfolio combining 35% Vanguard Dividend Appreciation ETF (VIG) and 65% Vanguard Total Corporate Bond ETF (VTC) offers a similar risk-return profile with lower fees and slightly better returns. This ETF mix has a blended expense ratio under 0.04%, compared to VWINX's 0.22%, and delivered a 5.82% annualized return over 8.39 years versus 5.34% for VWINX. The lower costs and flexibility make this two-ETF strategy a practical alternative for retirees seeking income and stability in their portfolios.