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Is Vanguard Target Retirement 2055 Fund (VFFVX) a Strong Mutual Fund Pick Right Now?
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Looking for a Target Date fund? You may want to consider Vanguard Target Retirement 2055 Fund (VFFVX - Free Report) as a possible option. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VFFVX, and the company is based out of Malvern, PA. Since Vanguard Target Retirement 2055 Fund made its debut in August of 2010, VFFVX has garnered more than $9.70 billion in assets. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.8%, and is 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 11.01%, 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 7.94%, the standard deviation of VFFVX over the past three years is 10.36%. The standard deviation of the fund over the past 5 years is 10.5% compared to the category average of 8.31%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.
Nevertheless, with a 5-year beta of 0.85, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -2.23. 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, VFFVX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 0.47%. VFFVX 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 $1,000 and that each subsequent investment needs to be at $1.
Bottom Line
Don't stop here for your research on Target Date 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 VFFVX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Vanguard Target Retirement 2055 Fund (VFFVX) a Strong Mutual Fund Pick Right Now?
Looking for a Target Date fund? You may want to consider Vanguard Target Retirement 2055 Fund (VFFVX - Free Report) as a possible option. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VFFVX, and the company is based out of Malvern, PA. Since Vanguard Target Retirement 2055 Fund made its debut in August of 2010, VFFVX has garnered more than $9.70 billion in assets. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.8%, and is 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 11.01%, 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 7.94%, the standard deviation of VFFVX over the past three years is 10.36%. The standard deviation of the fund over the past 5 years is 10.5% compared to the category average of 8.31%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.
Nevertheless, with a 5-year beta of 0.85, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -2.23. 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, VFFVX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 0.47%. VFFVX 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 $1,000 and that each subsequent investment needs to be at $1.
Bottom Line
Don't stop here for your research on Target Date 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 VFFVX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.