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High Yield - Bonds fund seekers should not consider taking a look at Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) at this time. VWEAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VWEAX 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 VWEAX, and the company is based out of Malvern, PA. Since Vanguard High-Yield Corporate Admiral made its debut in November of 2001, VWEAX has garnered more than $22.04 billion in assets. 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 carries a 5-year annualized total return of 4.34%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.03%, 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. Compared to the category average of 10.45%, the standard deviation of VWEAX over the past three years is 5.81%. The fund's standard deviation over the past 5 years is 6.66% 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 specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. VWEAX 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.
This fund has a beta of 0.34, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEAX has a positive alpha of 4.79, 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, VWEAX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.91%. Looking at the fund from a cost perspective, VWEAX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $50,000; 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 Admiral ( VWEAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
This could just be the start of your research on VWEAX in the High Yield - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is VWEAX a Strong Bond Fund Right Now?
High Yield - Bonds fund seekers should not consider taking a look at Vanguard High-Yield Corporate Admiral (VWEAX - Free Report) at this time. VWEAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VWEAX 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 VWEAX, and the company is based out of Malvern, PA. Since Vanguard High-Yield Corporate Admiral made its debut in November of 2001, VWEAX has garnered more than $22.04 billion in assets. 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 carries a 5-year annualized total return of 4.34%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.03%, 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. Compared to the category average of 10.45%, the standard deviation of VWEAX over the past three years is 5.81%. The fund's standard deviation over the past 5 years is 6.66% 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 specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. VWEAX 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.
This fund has a beta of 0.34, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEAX has a positive alpha of 4.79, 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, VWEAX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.91%. Looking at the fund from a cost perspective, VWEAX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $50,000; 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 Admiral ( VWEAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
This could just be the start of your research on VWEAX in the High Yield - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.