Looking for a Target Date fund? You may want to consider Vanguard Target Retirement 2025 Fund (VTTVX) as a possible option. VTTVX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Vanguard Group is based in Malvern, PA, and is the manager of VTTVX. The Vanguard Target Retirement 2025 Fund made its debut in October of 2003 and VTTVX has managed to accumulate roughly $72.86 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
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 8.52%, and is in the middle 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 3.68%, 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. The standard deviation of VTTVX over the past three years is 11.38% compared to the category average of 11.13%. The standard deviation of the fund over the past 5 years is 10.83% compared to the category average of 11.49%. This makes the fund less volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VTTVX has a 5-year beta of 0.61, which means it 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. Over the past 5 years, the fund has a negative alpha of -3.48. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VTTVX is a no load fund. It has an expense ratio of 0.08% compared to the category average of 0.37%. VTTVX is actually cheaper than its peers when you consider factors like cost.
