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Is Vanguard Wellington Administrative (VWENX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Allocation Balanced fund category, Vanguard Wellington Administrative (VWENX - Free Report) could be a potential option. VWENX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWENX 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
VWENX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Wellington Administrative made its debut in May of 2001, and since then, VWENX has accumulated about $87.63 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 8.81%, and is in the top 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 8.52%, which places it in the top 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. Compared to the category average of 7.79%, the standard deviation of VWENX over the past three years is 7.07%. The standard deviation of the fund over the past 5 years is 6.54% 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 should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, VWENX lost 32.46% and underperformed its peer group by 3.68%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.65, 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. With a positive alpha of 0.14, 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, VWENX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.89%. So, VWENX is actually cheaper than its peers from a cost perspective.
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.
Bottom Line
Overall, Vanguard Wellington Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Allocation Balanced segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Vanguard Wellington Administrative (VWENX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Allocation Balanced fund category, Vanguard Wellington Administrative (VWENX - Free Report) could be a potential option. VWENX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWENX 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
VWENX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Wellington Administrative made its debut in May of 2001, and since then, VWENX has accumulated about $87.63 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 8.81%, and is in the top 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 8.52%, which places it in the top 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. Compared to the category average of 7.79%, the standard deviation of VWENX over the past three years is 7.07%. The standard deviation of the fund over the past 5 years is 6.54% 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 should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, VWENX lost 32.46% and underperformed its peer group by 3.68%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.65, 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. With a positive alpha of 0.14, 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, VWENX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.89%. So, VWENX is actually cheaper than its peers from a cost perspective.
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.
Bottom Line
Overall, Vanguard Wellington Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Allocation Balanced segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.