Any investors hoping to find an Allocation Balanced fund could think about starting with Vanguard Managed Payout Investor VPGDX . VPGDX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
VPGDX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Managed Payout Investor made its debut in April of 2008, and since then, VPGDX has accumulated about $2.16 billion in assets, per the most up-to-date date available. The fund's current manager, John Ameriks, has been in charge of the fund since March of 2014.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VPGDX has a 5-year annualized total return of 8.09% and is 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 7.64%, which places it in the middle 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. VPGDX's standard deviation over the past three years is 5.61% compared to the category average of 6.91%. The standard deviation of the fund over the past 5 years is 5.79% compared to the category average of 6.73%. 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.
Nevertheless, with a 5-year beta of 0.55, the fund is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -0.59. This means that managers in this portfolio find it difficult to pick 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, VPGDX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.84%. So, VPGDX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $25,000, investors should also note that each subsequent investment needs to be at least $1.
Overall, Vanguard Managed Payout Investor has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
This could just be the start of your research on VPGDX in the Allocation Balanced 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.