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On the lookout for a High Yield - Bonds fund? Starting with Vanguard High-Yield Corporate Investor (VWEHX - Free Report) should not be a possibility at this time. VWEHX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various 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 responsible for VWEHX, and the company is based out of Malvern, PA. Vanguard High-Yield Corporate Investor debuted in December of 1978. Since then, VWEHX has accumulated assets of about $2.95 billion, according to the most recently available information. The fund's current manager, Michael Chang, has been in charge of the fund since August of 2022.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 5.09%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.01%, 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. Over the past three years, VWEHX's standard deviation comes in at 6.75%, compared to the category average of 10.45%. The fund's standard deviation over the past 5 years is 6.94% compared to the category average of 9.94%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. VWEHX has a modified duration of 2.98, which suggests that the fund will decline 2.98% for every hundred-basis-point increase in interest rates.
VWEHX carries a beta of 0.38, 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 5.37, which measures performance on a risk-adjusted basis.
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, VWEHX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 0.91%. 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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Investor ( VWEHX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Don't stop here for your research on High Yield - Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VWEHX to its peers as well 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 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) should not be a possibility at this time. VWEHX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various 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 responsible for VWEHX, and the company is based out of Malvern, PA. Vanguard High-Yield Corporate Investor debuted in December of 1978. Since then, VWEHX has accumulated assets of about $2.95 billion, according to the most recently available information. The fund's current manager, Michael Chang, has been in charge of the fund since August of 2022.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 5.09%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 9.01%, 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. Over the past three years, VWEHX's standard deviation comes in at 6.75%, compared to the category average of 10.45%. The fund's standard deviation over the past 5 years is 6.94% compared to the category average of 9.94%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. VWEHX has a modified duration of 2.98, which suggests that the fund will decline 2.98% for every hundred-basis-point increase in interest rates.
VWEHX carries a beta of 0.38, 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 5.37, which measures performance on a risk-adjusted basis.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, VWEHX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 0.91%. 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.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Investor ( VWEHX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Don't stop here for your research on High Yield - Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VWEHX to its peers as well 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.