Is Vanguard Target Retirement 2030 Fund (VTHRX) a Strong Mutual Fund Pick Right Now?

If you're looking for a Target Date fund category, then a possible option is Vanguard Target Retirement 2030 Fund (VTHRX). VTHRX 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 based in Malvern, PA, and is the manager of VTHRX. Vanguard Target Retirement 2030 Fund debuted in June of 2006. Since then, VTHRX has accumulated assets of about $110.97 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.35%, and is in the top 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 12.88%, 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. VTHRX's standard deviation over the past three years is 8.29% compared to the category average of 8.88%. The standard deviation of the fund over the past 5 years is 10.55% compared to the category average of 10.41%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.67, 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. VTHRX's 5-year performance has produced a negative alpha of -3.47, which means 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, VTHRX is a no load fund and it has an expense ratio of 0.08%.

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.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Want even more information about VTHRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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This article originally published on Zacks Investment Research (zacks.com).

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