Vanguard Target Retirement 2025 Fund

Class Inv (VTTVX)
Scorecard
4 / 5 Stars
Lipper
4 4 3 5 5
Zacks Investment Research
---
Standard & Poor's
5 / 5 Stars
TheStreet.com
B- (Buy)

U.S. News evaluated 47 Target Date 2021-2025 Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 18.01 percent over the past year, 10.42 percent over the past three years, 13.78 percent over the past five years, and 6.82 percent over the past decade.

Trailing Returns Updated 06.30.2014
Year to date 5.8%
1 Year 18.0%
3 Years (Annualized) 10.4%
5 Years (Annualized) 13.8%
10 Years (Annualized) 6.8%

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Summary

Vanguard Target Retirement 2025 fund caters to investors looking for a conservative retirement fund with a low price and broad exposure to stock and bond markets.

As of July 03, 2014, the fund has assets totaling $30.48 billion. Its portfolio consists of five underlying Vanguard stock and bond index funds. More assets are invested in stock funds than bond funds, and Vanguard recently raised this fund's international holdings The Vanguard Target Retirement 2025 Fund invests more heavily in U.S. stocks than the average 2021–2025 target-date fund. The fund also offers more diverse exposure to a variety of sectors, and recently began increasing its exposure to international stocks. It was able to weather the downturn with help from its more defensive large-cap holdings. However, because of its conservative posture, the fund didn't experience as strong of a rally as target-date funds with more exposure to foreign or small-cap stocks. The fund has returned 18.01 percent over the past year and 10.42 percent over the past three years.

Since all of the fund's underlying funds track indexes, it doesn't have to contend with risks tied to management changes or strategy shifts. The fund has returned 13.78 percent over the past five years.

Investment Strategy

The fund's investments become more conservative as it approaches 2025. It began with 90 percent of its assets in stocks and 10 percent allocated to bonds, according to Morningstar. While the fund is currently still heavy on stocks, it is designed to gradually shift its assets toward an even split between stocks and bonds by 2025. Within seven years after 2025, the fund's asset allocation should look similar to that of Vanguard's Target Retirement Income fund, according to the fund's prospectus.

Role in Portfolio

Morningstar calls the fund a core holding in an investment portfolio.

Management

Duane Kelly has managed the fund since its 2003 inception and has worked at Vanguard since 1989.

Fees

Vanguard Target Retirement 2025 Fund has an expense ratio of 0.00 percent.

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Risk

The fund provides less exposure to small-cap and emerging market stocks than some of its peers, which can cause it to lag at times.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 3 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 4 for one year, 3 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-06-11

The fund's Value Line Risk Rank, a measure of volatility, is 2 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-06-11

The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.

Money 70

In the annual Lipper/Barron's Fund Families Survey for 2010, Vanguard ranks 25 out of 57 fund families surveyed.

Lipper 2011-04-05

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "As investors burned by other firms have gotten religion about the kind of cheap, index-tracking strategies that are Vanguard's specialty, it has amassed assets."

Morningstar 2011-04-05

In the annual Lipper/Barron's Fund Families Survey for 2010, Vanguard ranks 25 out of 57 fund families surveyed.

Lipper 2011-04-05

Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "As investors burned by other firms have gotten religion about the kind of cheap, index-tracking strategies that are Vanguard's specialty, it has amassed assets."

Morningstar 2011-04-05