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Any investors hoping to find a High Yield - Bonds fund might consider looking past Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) . VWEAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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. Vanguard High-Yield Corporate Admiral debuted in November of 2001. Since then, VWEAX has accumulated assets of about $21.82 billion, according to the most recently available information. The fund is currently managed by Michael Chang who has been in charge of the fund since August of 2022.
Performance
Investors naturally seek funds with strong performance. VWEAX has a 5-year annualized total return of 3.67% 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 4.04%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 VWEAX over the past three years is 8.07% compared to the category average of 10.87%. Looking at the past 5 years, the fund's standard deviation is 8.61% compared to the category average of 12.11%. This makes the fund less volatile than its peers over the past half-decade.
VWEAX carries a beta of 0.27, 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 4.15, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWEAX 's junk bond component-bonds rated 'BB' or below-is at 86.8%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
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 0.12% compared to the category average of 0.91%. So, VWEAX is actually cheaper than its peers from a cost perspective.
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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Admiral ( VWEAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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. 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 VWEAX a Strong Bond Fund Right Now?
Any investors hoping to find a High Yield - Bonds fund might consider looking past Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) . VWEAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various 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. Vanguard High-Yield Corporate Admiral debuted in November of 2001. Since then, VWEAX has accumulated assets of about $21.82 billion, according to the most recently available information. The fund is currently managed by Michael Chang who has been in charge of the fund since August of 2022.
Performance
Investors naturally seek funds with strong performance. VWEAX has a 5-year annualized total return of 3.67% 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 4.04%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 VWEAX over the past three years is 8.07% compared to the category average of 10.87%. Looking at the past 5 years, the fund's standard deviation is 8.61% compared to the category average of 12.11%. This makes the fund less volatile than its peers over the past half-decade.
VWEAX carries a beta of 0.27, 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 4.15, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWEAX 's junk bond component-bonds rated 'BB' or below-is at 86.8%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
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 0.12% compared to the category average of 0.91%. So, VWEAX is actually cheaper than its peers from a cost perspective.
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.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Admiral ( VWEAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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. 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.