Is Vanguard Target Retirement Income Fund (VTINX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Mutual Fund Equity Report funds, consider Vanguard Target Retirement Income Fund (VTINX) as a possibility. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

History of Fund/Manager

VTINX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Target Retirement Income Fund made its debut in October of 2003, and since then, VTINX has accumulated about $39.08 billion in assets, per the most up-to-date date available. The fund's current manager, William Coleman, has been in charge of the fund since February of 2013.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 3.16%, and it sits 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 1.93%, 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. VTINX's standard deviation over the past three years is 7.49% compared to the category average of 7.92%. The fund's standard deviation over the past 5 years is 6.35% compared to the category average of 6.8%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VTINX has a 5-year beta of 0.33, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -1.65. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, VTINX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.86%. From a cost perspective, VTINX is actually cheaper than its peers.

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

Bottom Line

Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.

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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.