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Is Vanguard Target Retirement 2035 Fund (VTTHX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Target Date category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Target Retirement 2035 Fund (VTTHX - Free Report) . VTTHX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTTHX. Vanguard Target Retirement 2035 Fund made its debut in October of 2003, and since then, VTTHX has accumulated about $38.84 billion in assets, per the most up-to-date date available. 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 has delivered a 5-year annualized total return of 7.1%, and is 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 10.56%, 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. The standard deviation of VTTHX over the past three years is 8.79% compared to the category average of -43.9%. Looking at the past 5 years, the fund's standard deviation is 9.13% compared to the category average of -0.04%. 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. In VTTHX's case, the fund lost 48.04% in the most recent bear market and outperformed its peer group by 30%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.74, so investors should note that it is hypothetically less volatile than the market at large. 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 negative alpha of -1.22. This means that 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, VTTHX is a no load fund. It has an expense ratio of 0.13% compared to the category average of -48.04%. Looking at the fund from a cost perspective, VTTHX is actually more expensive than its peers.
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
Your research on the Target Date segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Target Retirement 2035 Fund (VTTHX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Target Date category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Target Retirement 2035 Fund (VTTHX - Free Report) . VTTHX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTTHX. Vanguard Target Retirement 2035 Fund made its debut in October of 2003, and since then, VTTHX has accumulated about $38.84 billion in assets, per the most up-to-date date available. 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 has delivered a 5-year annualized total return of 7.1%, and is 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 10.56%, 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. The standard deviation of VTTHX over the past three years is 8.79% compared to the category average of -43.9%. Looking at the past 5 years, the fund's standard deviation is 9.13% compared to the category average of -0.04%. 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. In VTTHX's case, the fund lost 48.04% in the most recent bear market and outperformed its peer group by 30%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.74, so investors should note that it is hypothetically less volatile than the market at large. 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 negative alpha of -1.22. This means that 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, VTTHX is a no load fund. It has an expense ratio of 0.13% compared to the category average of -48.04%. Looking at the fund from a cost perspective, VTTHX is actually more expensive than its peers.
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
Your research on the Target Date segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.