Is Vanguard Balanced Index Investor (VBINX) a good mutual fund choice right now?

IInvestors looking for a mutual fund equity reporting fund might consider Vanguard Balanced Index Investor (VBINX). The fund does not have a Zacks mutual fund ranking, although we were able to explore other metrics such as performance, volatility and cost.

Fund/manager history

Vanguard Group is based in Malvern, PA, and is the manager of VBINX. Vanguard Balanced Index Investor debuted in November 1992, and since then VBINX has accumulated approximately $302.07 million in assets, according to the most recent date available. The fund is currently managed by a team of investment professionals.

Performance

Investors are naturally looking for high performance funds. VBINX has a 5-year annualized total return of 10.93% and ranks in the top third among its peers in the category. If you’re interested in shorter timeframes, don’t overlook the fund’s 3-year annualized total return of 13.45%, which puts it in the top third over that time frame.

When looking at a fund’s performance, it’s also important to note the standard deviation of returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, the standard deviation of VBINX is 11.28%, compared to a category average of 13.55%. Looking back over the past 5 years, the fund’s standard deviation is 10.01% compared to the category average of 11.87%. This makes the fund less volatile than its peers over the past half-decade.

Risk factors

Investors should note that the fund has a 5-year beta of 0.63, which means it is hypothetically less volatile than the market as a whole. Another factor to consider is alpha, as it reflects the performance of a portfolio on a risk-adjusted basis relative to a benchmark, in this case the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.04. This means that the managers of this portfolio have difficulty choosing stocks that generate returns above the benchmark index.

Expenses

Costs are increasingly important for investing in mutual funds, especially as competition intensifies in this market. And all other things being equal, a lower-cost product will outperform its otherwise identical counterpart, so it’s essential for investors to take a closer look at these metrics. In terms of fees, VBINX is a no-load fund. It has an expense ratio of 0.18% compared to the category average of 0.86%. Cost-wise, VBINX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and each subsequent investment has no minimum amount.

Conclusion

For more information on the World Mutual Funds Mutual Funds Stock Report area, be sure to visit www.zacks.com/funds/mutual-funds. There you can learn more about the ranking process and dive even deeper into VBINX for more information. If you’re more of an equity investor, be sure to also check out our Zacks Rankings and comprehensive suite of tools we make available to both novice and professional investors.

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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.

Dolores W. Simon