Looking for an Allocation Balanced fund? You may want to consider Vanguard Managed Payout Investor (VPGDX) as a possible option. VPGDX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
VPGDX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Vanguard Group is responsible for VPGDX, and the company is based out of Malvern, PA. Since Vanguard Managed Payout Investor made its debut in April of 2008, VPGDX has garnered more than $1.35 billion in assets. The fund's current manager, Anatoly Shtekhman, has been in charge of the fund since April of 2016.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.71%, and it sits in the bottom 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 8.13%, which places it in the bottom 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 VPGDX over the past three years is 11.6% compared to the category average of 12.89%. Over the past 5 years, the standard deviation of the fund is 9.29% compared to the category average of 10.45%. This makes the fund less volatile than its peers over the past half-decade.
With a 5-year beta of 0.57, 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. VPGDX's 5-year performance has produced a negative alpha of -2.17, which means 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, VPGDX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.89%. So, VPGDX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $25,000 and that each subsequent investment needs to be at $1.
Overall, Vanguard Managed Payout Investor ( VPGDX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
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