Allocation Balanced fund seekers should consider taking a look at Vanguard Wellington Admiral (VWENX). VWENX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as VWENX. 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 responsible for VWENX, and the company is based out of Malvern, PA. Since Vanguard Wellington Admiral made its debut in May of 2001, VWENX has garnered more than $88.70 billion in assets. 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. This fund has delivered a 5-year annualized total return of 7.54%, 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 9.83%, 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. VWENX’s standard deviation over the past three years is 7.33% compared to the category average of 8.3%. Over the past 5 years, the standard deviation of the fund is 7.57% compared to the category average of 8.54%. This makes the fund less volatile than its peers over the past half-decade.
It’s always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VWENX’s case, the fund lost 32.46% in the most recent bear market and outperformed its peer group by 4%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VWENX has a 5-year beta of 0.61, which means it 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. The fund has produced a positive alpha over the past 5 years of 0.56, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VWENX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.89%. So, VWENX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $1.
Overall, Vanguard Wellington Admiral ( VWENX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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