On the lookout for an Allocation Balanced fund? Starting with Value Line Income & Growth Investor (VALIX - Free Report) is one possibility. VALIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
VALIX 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
Value Line is based in New York, NY, and is the manager of VALIX. Since Value Line Income & Growth Investor made its debut in October of 1952, VALIX has garnered more than $454.55 million in assets. Liane Rosenberg is the fund's current manager and has held that role since May of 2011.
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 9.25%, and it sits in the top 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 13.96%, 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. VALIX's standard deviation over the past three years is 12.65% compared to the category average of 8.13%. Over the past 5 years, the standard deviation of the fund is 11.8% compared to the category average of 8.16%. This makes the fund more volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. VALIX lost 29.48% in the most recent bear market and outperformed its peer group by 6.93%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VALIX has a 5-year beta of 0.95, which means it is likely to be less volatile than the market average. 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. With a negative alpha of -0.93, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 90.91% of its assets in stocks, which have an average market capitalization of $137.01 billion. Turnover is about 86%, so those in charge of the fund make more trades in a given year than the average of comparable funds.
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, VALIX is a no load fund. It has an expense ratio of 1.12% compared to the category average of 0.88%. VALIX is actually more expensive than its peers when you consider factors like cost.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $25.
Overall, Value Line Income & Growth Investor ( VALIX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
This could just be the start of your research on VALIXin the Allocation Balanced 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.