If you've been stuck searching for Target Date funds, consider Vanguard Target Retirement 2015 Fund (VTXVX - Free Report) as a possibility. VTXVX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTXVX. Vanguard Target Retirement 2015 Fund made its debut in October of 2003, and since then, VTXVX has accumulated about $15.15 billion in assets, per the most up-to-date date available. William A. Coleman is the fund's current manager and has held that role since February of 2013.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VTXVX has a 5-year annualized total return of 4.04% and is 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 4.73%, which places it in the bottom 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, VTXVX's standard deviation comes in at 4.7%, compared to the category average of -45.29%. The fund's standard deviation over the past 5 years is 5.05% compared to the category average of 0.1%. This makes the fund more volatile than its peers over the past half-decade.
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, VTXVX lost 34.99% and outperformed its peer group by 35%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 0.42, the fund is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a positive alpha of 0.03. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VTXVX is a no load fund. It has an expense ratio of 0.13% compared to the category average of -34.99%. From a cost perspective, VTXVX is actually more expensive than its peers.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $1.
This could just be the start of your research on VTXVXin the Target Date 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.