Vanguard High-Yield Corporate Fund (VWEHX)

Vanguard High-Yield Corporate Fund (VWEHX) is a top bond mutual fund. This Vanguard fund provides high yield of income for investors.

Vanguard High-Yield Corporate Fund

The investment objective of Vanguard High-Yield Corporate Fund is to achieve a high level of current income. The mutual fund utilizes its assets to purchase a diversified group of high-yielding, higher-risk corporate bonds-commonly known as “junk bonds”;-with medium- and lower-range credit-quality ratings. It invests >80% of its assets in corporate bonds that are rated below Baa by Moody’s Investors Service, Inc. The fund’s high-yield bonds and loans mostly have short- and intermediate-term maturities.

Fund Profile

• Fund Inception Date: 12/26/1978
• Ticker Symbol: VWEHX
• CUSIP: 922031208
• Beta (3yr): 0.06
• Rank in category (YTD): 89%
• Category: High Yield Bond
• Distribution/ Yield: 5.36%
• Capital Gains: check fund
• Expense Ratio: 0.23%
• Net Assets: $ 23.0 billion
• Number of Years Up: 30 years
• Number of Years Down: 4 years
• Average Maturity: 5.3 years
• Average Duration: 4.6 years
• Annual Turnover Rate: 26%

Updated on May 2017

High Yield Bond Fund

This Vanguard fund is managed by Michael L. Hong. It has large total net assets of $17.9 billion. The distribution is 5.92% and the most recent distribution was in May 2013 with $0.02963. The annual expense ratio is quite low, only 0.23%. The fund also has 30-day SEC Yield of 4.47%.

Morningstar analysts rank this mutual fund with 3-stars and Silver rating. Its YTD return is 1.14% as of June 17, 2013. The fund’s benchmark is Barclays US Corporate High Yield Index. It has an average maturity of 5.3 years and average duration of 4.6 years. The fund has its best 1-year total return in 2009 with 39.09%. It managed to achieve 30 years of positive returns since its inception. Based on the load adjusted returns, the performance of this fund is as below:

• Year 2017: 3.55% (YTD)
• Year 2016: 11.19%
• Year 2015: -1.40%
• Year 2014: 4.58%
• Year 2013: 4.54%

Besides the Investor shares (VWEHX), this Vanguard High Yield Corporate fund is also available in Admiral Shares (VWEAX). The initial investment for the brokerage account is $3,000. The minimum subsequent investment is $100. For retirement account or 401(k) account, please check with the fund administrator. This no load mutual fund can be purchased from 90 brokerages. They are Trade Station Securities, EP Fee Small, T Rowe Price, Schwab Retail, Ameriprise Brokerage, Scottrade Load, etc.

As of May 2013, the top distributions by issuer are Communication (19.5%), Finance (18.4%), Consumer Non-Cyclical (11.4%) and Consumer Cyclical (10.8%). This High Yield Corporate Fund Investor Shares has 399 total bonds and the yield to maturity is 4.9%.

Primary Risks in investing in this fund include credit risk, income risk, interest rate risk, liquidity risk and manager risk.

Disclosure: No Position

This Vanguard High-Yield Corporate Fund (VWEHX) is part of Kiplinger's 25 best mutual funds.