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Is Vanguard Target Retirement 2025 Fund (VTTVX) a Strong Mutual Fund Pick Right Now?
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If you're looking for a Target Date fund category, then a possible option is Vanguard Target Retirement 2025 Fund (VTTVX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VTTVX, and the company is based out of Malvern, PA. Since Vanguard Target Retirement 2025 Fund made its debut in October of 2003, VTTVX has garnered more than $41.86 billion in assets. William A. Coleman is the fund's current manager and has held that role since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.57%, 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 9.72%, 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. Compared to the category average of 7.57%, the standard deviation of VTTVX over the past three years is 5.89%. The fund's standard deviation over the past 5 years is 6.3% compared to the category average of 7.35%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, VTTVX lost 42.49% and underperformed its peer group by 2.67%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.63, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VTTVX's 5-year performance has produced a negative alpha of -1.16, which means 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, VTTVX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.47%. From a cost perspective, VTTVX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $1.
Bottom Line
Your research on the Target Date 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Vanguard Target Retirement 2025 Fund (VTTVX) a Strong Mutual Fund Pick Right Now?
If you're looking for a Target Date fund category, then a possible option is Vanguard Target Retirement 2025 Fund (VTTVX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VTTVX, and the company is based out of Malvern, PA. Since Vanguard Target Retirement 2025 Fund made its debut in October of 2003, VTTVX has garnered more than $41.86 billion in assets. William A. Coleman is the fund's current manager and has held that role since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.57%, 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 9.72%, 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. Compared to the category average of 7.57%, the standard deviation of VTTVX over the past three years is 5.89%. The fund's standard deviation over the past 5 years is 6.3% compared to the category average of 7.35%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, VTTVX lost 42.49% and underperformed its peer group by 2.67%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.63, the fund is likely to be less volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VTTVX's 5-year performance has produced a negative alpha of -1.16, which means 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, VTTVX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.47%. From a cost perspective, VTTVX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $1.
Bottom Line
Your research on the Target Date 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.