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Is Vanguard Target Retirement 2025 Fund (VTTVX) a Strong Mutual Fund Pick Right Now?

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Investors in search of a Target Date fund might want to consider looking at Vanguard Target Retirement 2025 Fund (VTTVX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VTTVX. Vanguard Target Retirement 2025 Fund made its debut in October of 2003, and since then, VTTVX has accumulated about $48.03 billion in assets, per the most up-to-date date available. The fund is currently managed by William Coleman who has been in charge of the fund since February of 2013.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.95%, and is 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 9.62%, 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, VTTVX's standard deviation comes in at 11.36%, compared to the category average of 10.94%. The fund's standard deviation over the past 5 years is 9.18% compared to the category average of 8.92%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.59, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VTTVX's 5-year performance has produced a negative alpha of -0.18, which means 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, VTTVX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 0.50%. Looking at the fund from a cost perspective, VTTVX is actually cheaper than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $1.

Bottom Line

Want even more information about VTTVX? 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. 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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