Any investors hoping to find an Allocation Balanced fund could think about starting with Vanguard Wellington Investor (VWELX - Free Report) . VWELX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
VWELX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across 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.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWELX. The Vanguard Wellington Investor made its debut in July of 1929 and VWELX has managed to accumulate roughly $16.68 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWELX has a 5-year annualized total return of 7.46% 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 9.75%, 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 8.3%, the standard deviation of VWELX over the past three years is 7.34%. Looking at the past 5 years, the fund's standard deviation is 7.58% compared to the category average of 8.54%. This makes the fund less 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. VWELX lost 32.54% in the most recent bear market and outperformed its peer group by 4%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 0.61, so investors should note that it is hypothetically less volatile than the market at large. 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. VWELX's 5-year performance has produced a positive alpha of 0.48, which means 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, VWELX is a no load fund. It has an expense ratio of 0.25% compared to the category average of 0.89%. From a cost perspective, VWELX 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.
Overall, Vanguard Wellington Investor ( VWELX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Wellington Investor ( VWELX ) looks like a good potential choice for investors right now.
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