If you have been looking for High Yield - Bonds fund category, a potential starting could be Vanguard High-Yield Corporate Admiral (VWEAX). VWEAX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that VWEAX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VWEAX. Vanguard High-Yield Corporate Admiral made its debut in November of 2001, and since then, VWEAX has accumulated about $21.52 billion in assets, per the most up-to-date date available. Michael Chang is the fund's current manager and has held that role since August of 2022.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.73%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.15%, which places it in the middle 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, VWEAX's standard deviation comes in at 8.19%, compared to the category average of 10.87%. Over the past 5 years, the standard deviation of the fund is 8.57% compared to the category average of 12.03%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.31, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWEAX has a positive alpha of 3.48, which measures performance on a risk-adjusted basis.

Ratings

Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWEAX 's junk bond component-bonds rated 'BB' or below-is at 86.8%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VWEAX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.93%. Looking at the fund from a cost perspective, VWEAX is actually cheaper than its peers.

This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $1.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Vanguard High-Yield Corporate Admiral ( VWEAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard High-Yield Corporate Admiral ( VWEAX ) looks like a somewhat average choice for investors right now.

Your research on the High Yield - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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