Vanguard Target Retirement 2025 Fund (VTTVX)

Vanguard Target Retirement 2025 fund (VTTVX) is a popular target date mutual fund. This Vanguard fund invests in stocks and bonds. It will adjust its assets over time. This balanced fund provides broad diversification while incrementally decreasing exposure to equities and increasing exposure to bonds as each fund’s target retirement date approaches.

This Vanguard Target Retirement 2025 fund continues to adjust for approximately seven years after that date until their allocations match that of the Target Retirement Income Fund.

VTTVX Fund Profile

• Fund Inception Date: 10/27/2003
• Ticker Symbol: VTTVX
• CUSIP: 92202E409
• Beta (3yr): 1.10
• Rank in category (YTD): 4%
• Category: Target Date 2021-2025
• Distribution Yield: 1.71%
• Capital Gains: -
• Expense Ratio: 0.17%
• Net Assets: $ 32.1 billion
• Number of Years Up: 8 year
• Number of Years Down: 2 year
• Annual Turnover Rate: 16%

This Vanguard fund has $32.1 billion of total net assets. The annual dividend is 1.71%. It has 4-stars and Gold rating from Morningstar. The fund managers are Michael H. Buek, William Coleman, and Walter Nejman. The portfolio turnover rate is low, only 16%. This mutual fund is also known as fund of funds. You can buy this mutual fund with $3,000 initial funding.

Vanguard Target Retirement 2025 Fund Performance

The fund performance has been good. It recorded 8 years of positive return and only 2 years of negative return since its inception in 2003. In 2014, the year-to-date return is 6.41%. Based on the load adjusted returns, the performance of VTTHX is:

• 1-year: 9.64%
• 3-year: 14.26%
• 5-year: 10.72%
• 10-year:  6.55%

The benchmarks are Target Retirement 2025 Composite Index and Dow Jones U.S. Total Stock Market Index. The asset allocation as of November 2014 is Stocks (68.88%), Bonds (31.08%) and Short-term reserves (0.04%). The allocations to underlying funds are Vanguard Total Stock Market Index Fund Investor Shares (48.7%), Vanguard Total Bond Market II Index Fund Investor Shares (24.8%), Vanguard Total International Stock Index Fund Investor Shares (20.2%), and Vanguard Total International Bond Index Fund (6.3%).

If you are interested in other Vanguard target date funds, you can check:

• Vanguard Target Retirement 2015 Fund
• Vanguard Target Retirement 2035 Fund

According to the fund prospectus, the primary investment risks are stock market risk, country/ regional risk, currency risk, interest rate risk, income risk, credit risk, call risk, prepayment risk, asset allocation risk, etc.

Pros:

• This Vanguard Target Retirement 2025 fund has low expense fee.
• It is great to use as a single fund in your retirement account.
• Performance has been great and consistent.

Cons:

• None

More: Best Vanguard Mutual Funds 2015