Investors in search of an Allocation Balanced fund might want to consider looking at Vanguard Target Retirement Income Fund (VTINX). VTINX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as VTINX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Vanguard Group is responsible for VTINX, and the company is based out of Malvern, PA. Vanguard Target Retirement Income Fund made its debut in October of 2003, and since then, VTINX has accumulated about $16.74 billion in assets, per the most up-to-date date available. The fund is currently managed by William Coleman who has been in charge of the fund since February of 2013.
Of course, investors look for strong performance in funds. VTINX has a 5-year annualized total return of 6.65% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.1%, which places it in the top third during this time-frame.
When looking at a fund’s performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. Compared to the category average of 6.8%, the standard deviation of VTINX over the past three years is 6.15%. Looking at the past 5 years, the fund’s standard deviation is 5% compared to the category average of 5.43%. This makes the fund less volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VTINX has a 5-year beta of 0.3, which means it is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a positive alpha of 0.46. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VTINX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.89%. VTINX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $1.
Your research on the Allocation Balanced segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.