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Is Vanguard LifeStrategy Growth Fund (VASGX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Allocation Balanced fund category, Vanguard LifeStrategy Growth Fund (VASGX - Free Report) could be a potential option. VASGX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VASGX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in 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. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Vanguard Group is responsible for VASGX, and the company is based out of Malvern, PA. Since Vanguard LifeStrategy Growth Fund made its debut in September of 1994, VASGX has garnered more than $14.40 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.88%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.21%, 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, VASGX's standard deviation comes in at 8.78%, compared to the category average of -36.4%. Over the past 5 years, the standard deviation of the fund is 8.89% compared to the category average of -0.11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In VASGX's case, the fund lost 47.55% in the most recent bear market and outperformed its peer group by 31%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VASGX has a 5-year beta of 0.76, 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. The fund has produced a negative alpha over the past 5 years of -1.51, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VASGX is a no load fund. It has an expense ratio of 0.14% compared to the category average of -47.55%. VASGX is actually more expensive than its peers when you consider factors like cost.
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 LifeStrategy Growth Fund ( VASGX ) has a high Zacks Mutual Fund rank, strong performance, worse downside risk, and higher fees compared to its peers.
This could just be the start of your research on VASGXin the Allocation Balanced category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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Is Vanguard LifeStrategy Growth Fund (VASGX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Allocation Balanced fund category, Vanguard LifeStrategy Growth Fund (VASGX - Free Report) could be a potential option. VASGX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VASGX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in 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. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Vanguard Group is responsible for VASGX, and the company is based out of Malvern, PA. Since Vanguard LifeStrategy Growth Fund made its debut in September of 1994, VASGX has garnered more than $14.40 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.88%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 10.21%, 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, VASGX's standard deviation comes in at 8.78%, compared to the category average of -36.4%. Over the past 5 years, the standard deviation of the fund is 8.89% compared to the category average of -0.11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In VASGX's case, the fund lost 47.55% in the most recent bear market and outperformed its peer group by 31%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VASGX has a 5-year beta of 0.76, 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. The fund has produced a negative alpha over the past 5 years of -1.51, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VASGX is a no load fund. It has an expense ratio of 0.14% compared to the category average of -47.55%. VASGX is actually more expensive than its peers when you consider factors like cost.
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 LifeStrategy Growth Fund ( VASGX ) has a high Zacks Mutual Fund rank, strong performance, worse downside risk, and higher fees compared to its peers.
This could just be the start of your research on VASGXin the Allocation Balanced category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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.