Technology

Is Vanguard Target Retirement 2055 Fund (VFFVX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Target Date funds, consider Vanguard Target Retirement 2055 Fund (VFFVX) as a possibility. VFFVX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

History of Fund/Manager

Vanguard Group is responsible for VFFVX, and the company is based out of Malvern, PA. The Vanguard Target Retirement 2055 Fund made its debut in August of 2010 and VFFVX has managed to accumulate roughly $11.35 billion in assets, as of the most recently available information. William A. Coleman is the fund's current manager and has held that role since February of 2013.

Performance

Of course, investors look for strong performance in funds. VFFVX has a 5-year annualized total return of 8.36% and is 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 11.79%, 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. The standard deviation of the fund over the past 5 years is 10.42% compared to the category average of -43.9%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.

Even still, the fund has a 5-year beta of 0.85, 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. With a negative alpha of -1.56, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, VFFVX is a no load fund and it has an expense ratio of 0.07%.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $1.

Bottom Line

This could just be the start of your research on VFFVXin the Target Date category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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