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Any investors hoping to find a High Yield - Bonds fund could think about starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) . VWEHX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEHX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEHX. Vanguard High-Yield Corporate Investor debuted in December of 1978. Since then, VWEHX has accumulated assets of about $3.84 billion, according to the most recently available information. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWEHX has a 5-year annualized total return of 5.42% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.61%, 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. Over the past three years, VWEHX's standard deviation comes in at 8.25%, compared to the category average of 11.27%. The fund's standard deviation over the past 5 years is 7.04% compared to the category average of 9.94%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.69, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEHX has a positive alpha of 2.48, which measures performance on a risk-adjusted basis.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VWEHX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 1.01%. From a cost perspective, VWEHX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Investor ( VWEHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the High Yield - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VWEHX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is VWEHX a Strong Bond Fund Right Now?
Any investors hoping to find a High Yield - Bonds fund could think about starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) . VWEHX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEHX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEHX. Vanguard High-Yield Corporate Investor debuted in December of 1978. Since then, VWEHX has accumulated assets of about $3.84 billion, according to the most recently available information. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWEHX has a 5-year annualized total return of 5.42% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.61%, 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. Over the past three years, VWEHX's standard deviation comes in at 8.25%, compared to the category average of 11.27%. The fund's standard deviation over the past 5 years is 7.04% compared to the category average of 9.94%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.69, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEHX has a positive alpha of 2.48, which measures performance on a risk-adjusted basis.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VWEHX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 1.01%. From a cost perspective, VWEHX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Investor ( VWEHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the High Yield - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VWEHX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.