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Is Vanguard Target Retirement 2030 Fund (VTHRX) a Strong Mutual Fund Pick Right Now?
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Investors in search of a Target Date fund might want to consider looking at Vanguard Target Retirement 2030 Fund (VTHRX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
VTHRX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. The Vanguard Target Retirement 2030 Fund made its debut in June of 2006 and VTHRX has managed to accumulate roughly $33.99 billion in assets, as of the most recently available information. The fund's current manager, William A. Coleman, has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 6.18%, 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 7.23%, which places it in the middle 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. VTHRX's standard deviation over the past three years is 7.02% compared to the category average of 7.24%. The fund's standard deviation over the past 5 years is 7.44% compared to the category average of 7.5%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VTHRX's case, the fund lost 45.96% in the most recent bear market and underperformed its peer group by 0.7%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 0.71, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.75. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VTHRX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.46%. So, VTHRX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Your research on the Target Date 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Target Retirement 2030 Fund (VTHRX) a Strong Mutual Fund Pick Right Now?
Investors in search of a Target Date fund might want to consider looking at Vanguard Target Retirement 2030 Fund (VTHRX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
VTHRX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. The Vanguard Target Retirement 2030 Fund made its debut in June of 2006 and VTHRX has managed to accumulate roughly $33.99 billion in assets, as of the most recently available information. The fund's current manager, William A. Coleman, has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 6.18%, 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 7.23%, which places it in the middle 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. VTHRX's standard deviation over the past three years is 7.02% compared to the category average of 7.24%. The fund's standard deviation over the past 5 years is 7.44% compared to the category average of 7.5%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VTHRX's case, the fund lost 45.96% in the most recent bear market and underperformed its peer group by 0.7%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 0.71, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.75. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VTHRX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.46%. So, VTHRX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Your research on the Target Date 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.