Any investors hoping to find an Allocation Balanced fund could think about starting with Vanguard Wellington Admiral (VWENX). VWENX holds 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 based in Malvern, PA, and is the manager of VWENX. Vanguard Wellington Admiral made its debut in May of 2001, and since then, VWENX has accumulated about $95.24 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Of course, investors look for strong performance in funds. VWENX has a 5-year annualized total return of 8.64% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.81%, 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. Over the past three years, VWENX's standard deviation comes in at 7.14%, compared to the category average of 8.45%. The standard deviation of the fund over the past 5 years is 7.45% compared to the category average of 8.69%. 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. In VWENX's case, the fund lost 32.46% in the most recent bear market and outperformed its peer group by 4%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.6, 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. VWENX's 5-year performance has produced a positive alpha of 1.06, 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, VWENX is a no load fund. It has an expense ratio of 0.18% compared to the category average of 0.92%. VWENX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to 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 the Allocation Balanced area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VWENX too 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.
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