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Is Vanguard Wellesley Income Investor (VWINX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding an Allocation Balanced fund? Vanguard Wellesley Income Investor (VWINX - Free Report) is a potential starting point. VWINX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

VWINX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VWINX. Vanguard Wellesley Income Investor made its debut in July of 1970, and since then, VWINX has accumulated about $11.57 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. VWINX has a 5-year annualized total return of 4.89% and it sits 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 5.08%, 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, VWINX's standard deviation comes in at 4.37%, compared to the category average of 8.13%. Looking at the past 5 years, the fund's standard deviation is 4.38% compared to the category average of 8.16%. 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. VWINX lost 18.87% in the most recent bear market and outperformed its peer group by 17.53%. These results could imply that the fund is a better choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 0.32, 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. VWINX's 5-year performance has produced a positive alpha of 1.64, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

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, VWINX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 0.88%. VWINX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.

Bottom Line

Overall, Vanguard Wellesley Income Investor ( VWINX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VWINX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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