Mutual funds are attractive investment assets for investors who like passive income from investments over a particular period. You need to pay small management fees over a specific period to generate an attractive return from investments on these index funds. Vanguard Balanced Index Fund is a good choice for financial investors.
However, it requires researching any investment or checking on several data such as historical data, performance, return info, risk factors, fees, etc., before investing to obtain the potentiality. This article about the Vanguard Balanced Index Fund contains a complete review and every primary info about the fund.
What is the Vanguard Balanced Index Fund?
The Vanguard Balanced Index Fund (VBIAX) is a mutual fund that helps individual investors diversify their portfolios. This fund usually invests 60% of its assets in stocks and the other 40% in bonds. VBIAX tracks the performances of CRSP US Total Market Index (60%) and Bloomberg Barclays U.S. Aggregate Float Adjusted Index (40%).
The CRSP US Total Market Index represents the total investable United States stock market, including small-cap, microcap, large-cap, and mid-cap stocks. On the other hand, Bloomberg Barclays U.S. Aggregate Float Adjusted Index represents the fixed-income securities of investment-grade with more than one-year maturities. This fund’s highly diversified feature helps keep this fund safe during volatile periods.
The parent company of this fund, Vanguard, is the largest mutual fund provider in the United States and offers a wide array of ETFs and mutual funds. The portfolio style of this fund is Balanced and belongs to the VANGUARD ADMIRAL fund family. This fund has investments in several sectors, including basic materials, real estate, utilities, energy, healthcare, technology, financial services, etc.
The top ten holdings of VBIAX include Microsoft Corp, Apple Inc, Amazon.com Inc, NVIDIA Corp, Tesla Inc, etc.
History of the fund
The Vanguard Group, Malvern, Pennsylvania, is one of the largest organizations with significant securities and fixed income managers and is the parent company of VBIAX. The fund VBIAX has been operating for over two decades as the inception date is 13 Nov 2000. A team of three managers manages this fund with tenures ranging from three to six years; Joshua C. Barrickman, Gerard C. O’Reilly, and William A. Coleman are the three managers of this fund. VBIAX currently has $60.96 Billion in assets under management.
This fund is floating near $45.71 today as of writing.
Ranking info
The fund VBIAX has been operating under the large bend category of the popular Morningstar organization. Checking on ranking info is essential as we get the idea about the investment assets as ranking organizations compare many investments assets in a similar category. The “Star” rating category requires at least three years of performance for the Morning Star.
It gives a five-star rating for the top 10% of any category, the following 22.5% receives a four-star rating, and the next 35% belongs to the three-star category. Under the Allocation-50% to 70% Equity, this fund VBIAX receives an overall four-star rating from Morningstar and is not ranked yet.
Return info
The fund VBIAX has shown an impressive return historically. Checking on return info enlights the performance of any investment asset. VBIAX has had a 9.61% return for the one-year duration, a 13.56% return on three-year duration, an 11.06% return on five-year duration, a 10.11% return on ten-years duration, and an 8.64% return for a lifetime since its inception. We are attaching the return info chart of this fund, including many other funds, to compare and get an idea about the potential.
We are attaching the calendar year total return chart for better understanding.
Performance info
It is worth checking on performance info as investors usually seek assets with solid performances. VBIAX has a 5.97% year-to-date return and the five years average return is 7.58%. In the past twenty years, this fund was on an uptrend in sixteen years, and the other four years were a declining year for this fund, which is quite impressive for any investment in the same category.
For a better understanding, check on the trailing returns vs. benchmarks info.
We are attaching a hypothetical growth chart with a 10k investment in this fund that illustrates the fund’s performance.
Fees and costs
VBIAX has an expense ratio of 0.07%, so you can group it to the low expense category.
VBIAX has an expense ratio of 0.07%, so that you can group it to the low expense category.
Meanwhile, the transaction cost is $75. This fund requires an initial investment of $2500.
Risk measurement
Investment funds track performances of other financial assets. So it involves risks as the stock market responds to many issues such as regulatory, adverse issuer, political, economic, market, or other developments. The risk magnifies as government policies, sanctions, inflation, interest rate, etc. This fund makes profits from investing in stocks of significant companies and bonds, so any decline in these assets can affect the fund’s performance and return. The investment pattern and duration also relate to the risk factors of this fund. Check the risk statistic chart below for a better understanding.
Again, several sectors of investment such as technology, the financial sector, healthcare, etc., can depreciate for several reasons, and that depreciation can affect the growth of this fund.
Volatility measurement
The beta value of VBIAX is 0.99, and the Sharpe ratio is 1.13. Meanwhile, the standard deviation is 11.26.
The Vanguard Balanced Index fund forecast 2022
We checked all the valuable information of this fund for our research purpose. This fund has been smoothly growing since its inception. Although, recent covid-19 pandemic surge, VBIAX recovers quickly and continues to grow. Observing all factors like performance info, return info, cost, fees, etc., we list this fund as a potential investment for the subsequent year 2022.
Final thought
This article includes all primary data of the fund VBIAX. Any investor who can afford the initial investment amount of $2500 can invest in this fund. Before investing, we suggest checking on several sectors such as investment duration, transaction fees, region, etc.
