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Is Vanguard Wellesley Income Investor (VWINX) 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 Wellesley Income Investor (VWINX - Free Report) . VWINX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWINX 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
Vanguard Group is based in Malvern, PA, and is the manager of VWINX. Since Vanguard Wellesley Income Investor made its debut in July of 1970, VWINX has garnered more than $12.69 billion in assets. A team of investment professionals is the fund's current manager.
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 5.54%, and it sits in the middle 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 5.81%, which places it in the middle 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, VWINX's standard deviation comes in at 4.33%, compared to the category average of 7.79%. The standard deviation of the fund over the past 5 years is 4.35% compared to the category average of 7.63%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, VWINX lost 18.87% and underperformed comparable funds by 17.27%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.33, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VWINX has generated a positive alpha over the past five years of 0.87, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VWINX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 0.89%. So, VWINX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Wellesley Income Investor has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Want even more information about VWINX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 Vanguard Wellesley Income Investor (VWINX) 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 Wellesley Income Investor (VWINX - Free Report) . VWINX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWINX 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
Vanguard Group is based in Malvern, PA, and is the manager of VWINX. Since Vanguard Wellesley Income Investor made its debut in July of 1970, VWINX has garnered more than $12.69 billion in assets. A team of investment professionals is the fund's current manager.
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 5.54%, and it sits in the middle 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 5.81%, which places it in the middle 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, VWINX's standard deviation comes in at 4.33%, compared to the category average of 7.79%. The standard deviation of the fund over the past 5 years is 4.35% compared to the category average of 7.63%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, VWINX lost 18.87% and underperformed comparable funds by 17.27%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.33, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VWINX has generated a positive alpha over the past five years of 0.87, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VWINX is a no load fund. It has an expense ratio of 0.23% compared to the category average of 0.89%. So, VWINX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Wellesley Income Investor has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Want even more information about VWINX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.