Is Vanguard LifeStrategy Moderate Growth Fund (VSMGX) a Strong Mutual Fund Pick Right Now?

Have you been searching for an Allocation Balanced fund? You might want to begin with Vanguard LifeStrategy Moderate Growth Fund (VSMGX). VSMGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

VSMGX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across 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.

VSMGX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard LifeStrategy Moderate Growth Fund made its debut in September of 1994, VSMGX has garnered more than $21.97 billion in assets. The fund’s current manager is a team of investment professionals.

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.16%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.67%, 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. Over the past three years, VSMGX’s standard deviation comes in at 12.14%, compared to the category average of 12.56%. Looking at the past 5 years, the fund’s standard deviation is 12.08% compared to the category average of 12.76%. This makes the fund less volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 0.65, so it is likely going to be less volatile than the market at large. 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. The fund has produced a negative alpha over the past 5 years of -3.75, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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