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Any investors hoping to find a High Yield - Bonds fund could think about starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) . VWEHX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VWEHX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
VWEHX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard High-Yield Corporate Investor made its debut in December of 1978, and since then, VWEHX has accumulated about $3.93 billion in assets, per the most up-to-date date available. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Investors naturally seek funds with strong performance. VWEHX has a 5-year annualized total return of 6.04% and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.73%, 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 8.34%, compared to the category average of 12.14%. The fund's standard deviation over the past 5 years is 6.64% compared to the category average of 9.96%. This makes the fund less volatile than its peers over the past half-decade.
VWEHX carries a beta of 0.59, 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 3.88, 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%. VWEHX is actually cheaper than its peers when you consider factors like cost.
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, this fund looks like a great 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 VWEHX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is VWEHX a Strong Bond Fund Right Now?
Any investors hoping to find a High Yield - Bonds fund could think about starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) . VWEHX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VWEHX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
VWEHX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard High-Yield Corporate Investor made its debut in December of 1978, and since then, VWEHX has accumulated about $3.93 billion in assets, per the most up-to-date date available. The fund is currently managed by Michael L. Hong who has been in charge of the fund since February of 2008.
Performance
Investors naturally seek funds with strong performance. VWEHX has a 5-year annualized total return of 6.04% and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.73%, 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 8.34%, compared to the category average of 12.14%. The fund's standard deviation over the past 5 years is 6.64% compared to the category average of 9.96%. This makes the fund less volatile than its peers over the past half-decade.
VWEHX carries a beta of 0.59, 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 3.88, 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%. VWEHX is actually cheaper than its peers when you consider factors like cost.
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, this fund looks like a great 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 VWEHX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.