Any investors who are searching for Target Date funds should take a look at Vanguard Target Retirement 2035 Fund (VTTHX). VTTHX 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
VTTHX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Target Retirement 2035 Fund debuted in October of 2003. Since then, VTTHX has accumulated assets of about $104.92 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 8.25%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.74%, which places it in the top 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. VTTHX's standard deviation over the past three years is 13.47% compared to the category average of 13.64%. Over the past 5 years, the standard deviation of the fund is 14.05% compared to the category average of 14.41%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.75, 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 -3.86. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTTHX is a no load fund. It has an expense ratio of 0.08% compared to the category average of 0.39%. Looking at the fund from a cost perspective, VTTHX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $1.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Don't stop here for your research on Target Date funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VTTHX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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