Is Vanguard LifeStrategy Income Fund (VASIX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard LifeStrategy Income Fund (VASIX). VASIX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

VASIX 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.

VASIX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard LifeStrategy Income Fund debuted in September of 1994. Since then, VASIX has accumulated assets of about $3.97 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 2.07%, 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 -0.36%, which places it in the bottom 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. The standard deviation of VASIX over the past three years is 8.36% compared to the category average of 7.75%. The fund’s standard deviation over the past 5 years is 7.34% compared to the category average of 7.44%. This makes the fund less volatile than its peers over the past half-decade.

With a 5-year beta of 0.34, the fund 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. With a negative alpha of -4.5, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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