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Is Vanguard LifeStrategy Moderate Growth Fund (VSMGX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Allocation Balanced funds, a place to start could be Vanguard LifeStrategy Moderate Growth Fund (VSMGX - Free Report) . VSMGX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VSMGX 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 VSMGX. Vanguard LifeStrategy Moderate Growth Fund debuted in September of 1994. Since then, VSMGX has accumulated assets of about $16.18 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VSMGX has a 5-year annualized total return of 5.79% 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 7.77%, 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. VSMGX's standard deviation over the past three years is 6.23% compared to the category average of 6.98%. The fund's standard deviation over the past 5 years is 6.66% compared to the category average of 7.45%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. VSMGX lost 37.9% in the most recent bear market and underperformed comparable funds by 1.52%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.57, 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. VSMGX's 5-year performance has produced a negative alpha of -0.68, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
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, VSMGX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 0.89%. Looking at the fund from a cost perspective, VSMGX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard LifeStrategy Moderate Growth Fund ( VSMGX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VSMGX to its peers 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 LifeStrategy Moderate Growth Fund (VSMGX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Allocation Balanced funds, a place to start could be Vanguard LifeStrategy Moderate Growth Fund (VSMGX - Free Report) . VSMGX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VSMGX 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 VSMGX. Vanguard LifeStrategy Moderate Growth Fund debuted in September of 1994. Since then, VSMGX has accumulated assets of about $16.18 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VSMGX has a 5-year annualized total return of 5.79% 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 7.77%, 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. VSMGX's standard deviation over the past three years is 6.23% compared to the category average of 6.98%. The fund's standard deviation over the past 5 years is 6.66% compared to the category average of 7.45%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. VSMGX lost 37.9% in the most recent bear market and underperformed comparable funds by 1.52%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.57, 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. VSMGX's 5-year performance has produced a negative alpha of -0.68, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
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, VSMGX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 0.89%. Looking at the fund from a cost perspective, VSMGX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard LifeStrategy Moderate Growth Fund ( VSMGX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VSMGX to its peers 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.