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Is Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Allocation Balanced funds, consider Vanguard STAR Fund (VGSTX - Free Report) as a possibility. VGSTX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as VGSTX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
VGSTX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard STAR Fund made its debut in March of 1985 and VGSTX has managed to accumulate roughly $22.01 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. VGSTX has a 5-year annualized total return of 6.92% 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 8.76%, 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. VGSTX's standard deviation over the past three years is 8.03% compared to the category average of 7.36%. The standard deviation of the fund over the past 5 years is 8.08% compared to the category average of 7.65%. 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. VGSTX lost 36.08% in the most recent bear market and outperformed its peer group by 0%. These results could imply that the fund is an on par choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.65, which means it is hypothetically less volatile than the market at large. 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. With a negative alpha of -0.73, managers in this portfolio find it difficult to pick 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, VGSTX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.89%. VGSTX 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
Overall, Vanguard STAR Fund ( VGSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VGSTXin 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. 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 STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Allocation Balanced funds, consider Vanguard STAR Fund (VGSTX - Free Report) as a possibility. VGSTX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as VGSTX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
VGSTX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard STAR Fund made its debut in March of 1985 and VGSTX has managed to accumulate roughly $22.01 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. VGSTX has a 5-year annualized total return of 6.92% 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 8.76%, 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. VGSTX's standard deviation over the past three years is 8.03% compared to the category average of 7.36%. The standard deviation of the fund over the past 5 years is 8.08% compared to the category average of 7.65%. 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. VGSTX lost 36.08% in the most recent bear market and outperformed its peer group by 0%. These results could imply that the fund is an on par choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.65, which means it is hypothetically less volatile than the market at large. 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. With a negative alpha of -0.73, managers in this portfolio find it difficult to pick 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, VGSTX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.89%. VGSTX 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
Overall, Vanguard STAR Fund ( VGSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VGSTXin 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. 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.