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Is Vanguard Tax-Managed Balanced Fund (VTMFX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Tax-Managed Balanced Fund (VTMFX - Free Report) . VTMFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VTMFX 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 based in Malvern, PA, and is the manager of VTMFX. Since Vanguard Tax-Managed Balanced Fund made its debut in September of 1994, VTMFX has garnered more than $4.63 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. VTMFX has a 5-year annualized total return of 6.79% 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 7.8%, 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 7.14%, the standard deviation of VTMFX over the past three years is 5.59%. The standard deviation of the fund over the past 5 years is 5.48% compared to the category average of 7.27%. 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 VTMFX's case, the fund lost 25.22% in the most recent bear market and outperformed its peer group by 11.18%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VTMFX has a 5-year beta of 0.47, 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 1.18. This means that managers in this portfolio are skilled in picking 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, VTMFX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 0.88%. VTMFX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $10,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Tax-Managed Balanced Fund ( VTMFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Allocation Balanced 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 VTMFX 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 Vanguard Tax-Managed Balanced Fund (VTMFX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Tax-Managed Balanced Fund (VTMFX - Free Report) . VTMFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VTMFX 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 based in Malvern, PA, and is the manager of VTMFX. Since Vanguard Tax-Managed Balanced Fund made its debut in September of 1994, VTMFX has garnered more than $4.63 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. VTMFX has a 5-year annualized total return of 6.79% 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 7.8%, 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 7.14%, the standard deviation of VTMFX over the past three years is 5.59%. The standard deviation of the fund over the past 5 years is 5.48% compared to the category average of 7.27%. 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 VTMFX's case, the fund lost 25.22% in the most recent bear market and outperformed its peer group by 11.18%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VTMFX has a 5-year beta of 0.47, 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 1.18. This means that managers in this portfolio are skilled in picking 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, VTMFX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 0.88%. VTMFX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $10,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Tax-Managed Balanced Fund ( VTMFX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Allocation Balanced 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 VTMFX 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.