Investors in search of a Allocation Balanced fund might want to consider looking at Vanguard Target Retirement Income Fund (VTINX). While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as VTINX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTINX. Vanguard Target Retirement Income Fund debuted in October of 2003. Since then, VTINX has accumulated assets of about $35.59 billion, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Performance
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 3.55%, 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 8.79%, which places it in the middle third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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 6.09%, the standard deviation of VTINX over the past three years is 5.6%. The fund’s standard deviation over the past 5 years is 7.14% compared to the category average of 7.51%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.4, which means 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. VTINX has generated a negative alpha over the past five years of -4.12, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.