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On the lookout for a High Yield - Bonds fund? Starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) is one possibility. VWEHX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEHX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEHX. Since Vanguard High-Yield Corporate Investor made its debut in December of 1978, VWEHX has garnered more than $3.88 billion in assets. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.29%, and is in the middle 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 5.7%, 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. Over the past three years, VWEHX's standard deviation comes in at 8.42%, compared to the category average of 12.21%. Over the past 5 years, the standard deviation of the fund is 6.81% compared to the category average of 10.19%. This makes the fund less volatile than its peers over the past half-decade.
VWEHX carries a beta of 0.51, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 4.44, 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, VWEHX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 1%. Looking at the fund from a cost perspective, VWEHX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Investor ( VWEHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Investor ( VWEHX ) looks like a good potential choice for investors right now.
Want even more information about VWEHX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 VWEHX a Strong Bond Fund Right Now?
On the lookout for a High Yield - Bonds fund? Starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) is one possibility. VWEHX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWEHX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWEHX. Since Vanguard High-Yield Corporate Investor made its debut in December of 1978, VWEHX has garnered more than $3.88 billion in assets. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.29%, and is in the middle 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 5.7%, 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. Over the past three years, VWEHX's standard deviation comes in at 8.42%, compared to the category average of 12.21%. Over the past 5 years, the standard deviation of the fund is 6.81% compared to the category average of 10.19%. This makes the fund less volatile than its peers over the past half-decade.
VWEHX carries a beta of 0.51, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 4.44, 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, VWEHX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 1%. Looking at the fund from a cost perspective, VWEHX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Corporate Investor ( VWEHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Investor ( VWEHX ) looks like a good potential choice for investors right now.
Want even more information about VWEHX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.