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High Yield - Bonds fund seekers should consider taking a look at Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) . VWEAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEAX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEAX. Since Vanguard High-Yield Corporate Admiral made its debut in November of 2001, VWEAX has garnered more than $22.70 billion in assets. The fund's current manager, Michael L. Hong, has been in charge of the fund since February of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 5.66%, 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 6.12%, 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 6.65%, the standard deviation of VWEAX over the past three years is 4.23%. Over the past 5 years, the standard deviation of the fund is 4.53% compared to the category average of 7.2%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.37, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEAX has a positive alpha of 4.19, which measures performance on a risk-adjusted basis.
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, VWEAX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 1.02%. From a cost perspective, VWEAX is actually cheaper than its peers.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Admiral ( VWEAX ) 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.
For additional information on the High Yield - Bonds 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 VWEAX too 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 VWEAX a Strong Bond Fund Right Now?
High Yield - Bonds fund seekers should consider taking a look at Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) . VWEAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEAX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEAX. Since Vanguard High-Yield Corporate Admiral made its debut in November of 2001, VWEAX has garnered more than $22.70 billion in assets. The fund's current manager, Michael L. Hong, has been in charge of the fund since February of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 5.66%, 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 6.12%, 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 6.65%, the standard deviation of VWEAX over the past three years is 4.23%. Over the past 5 years, the standard deviation of the fund is 4.53% compared to the category average of 7.2%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.37, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEAX has a positive alpha of 4.19, which measures performance on a risk-adjusted basis.
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, VWEAX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 1.02%. From a cost perspective, VWEAX is actually cheaper than its peers.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Admiral ( VWEAX ) 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.
For additional information on the High Yield - Bonds 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 VWEAX too 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.