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Is Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that may not be worth investigating is Vanguard STAR Fund (VGSTX - Free Report) . VGSTX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VGSTX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
VGSTX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard STAR Fund made its debut in March of 1985, and since then, VGSTX has accumulated about $23.83 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.25%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.99%, which places it in the top 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 9.08%, the standard deviation of VGSTX over the past three years is 9.5%. Over the past 5 years, the standard deviation of the fund is 11.65% compared to the category average of 10.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.73, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VGSTX has generated a negative alpha over the past five years of -5.06, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSTX is a no load fund and it has an expense ratio of 0.29%.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should 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
As a mutual fund with a 'sell' rank, VGSTX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Allocation Balanced. This fund from Vanguard Group needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Vanguard STAR Fund in the future.
Don't stop here for your research on Allocation Balanced 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 VGSTX to its peers as well 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 Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that may not be worth investigating is Vanguard STAR Fund (VGSTX - Free Report) . VGSTX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VGSTX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
VGSTX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard STAR Fund made its debut in March of 1985, and since then, VGSTX has accumulated about $23.83 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 6.25%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.99%, which places it in the top 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 9.08%, the standard deviation of VGSTX over the past three years is 9.5%. Over the past 5 years, the standard deviation of the fund is 11.65% compared to the category average of 10.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.73, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VGSTX has generated a negative alpha over the past five years of -5.06, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSTX is a no load fund and it has an expense ratio of 0.29%.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should 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
As a mutual fund with a 'sell' rank, VGSTX is in the bottom 40% of all funds we cover and it may be one to avoid putting on your short list of possible picks in Allocation Balanced. This fund from Vanguard Group needs to turn around some of its key fundamental metrics such as the Zacks Ranks of its holdings, alpha, and performance in order for investors to consider Vanguard STAR Fund in the future.
Don't stop here for your research on Allocation Balanced 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 VGSTX to its peers as well 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.