Mutual Fund Analysis

Mutual Fund Analysis

FIN 420

Mutual Fund Analysis

The common stock I chose was a Vanguard mutual fund account (VTSMX) and what I found from this stock is that Vanguard is diverse in some of the top companies like Apple, IBM, and Amazon. They have 20.40% in the technology sector and 19.40% in the financial sector of the market. Last year they jumped to their year high at $73.61 per share within the first 3 quarters. Vanguard took a big hit in December when investors seen the stock plummet to $58.17 per share. In the recent quarter Vanguard recovered its losses and ended the market on 4/12/2019 at $72.32 per share. They use a more of a growth fund objective because their top 18% of their portfolio is invested in the 10 top companies in the S&P 500. Vanguards managers are more interested in long-term capital with more track record of financial growth, rather than short-term growth and high risk. They mirror the US Total Market Index which consist of all the vested stock market including all small to large stocks traded on the NYSE and NASDAQ indexes (Vanguard, n.d).

Fixed Income Bonds

American Fund has a very significant fund called American High-Income Trust (AHIFX) and from what I see their funds are mostly in U.S Bonds with a whopping 76.9% and second is Non-US bonds at 15.2%. In the first years of vested income the return and volatility are low. They have vested money into mostly B bones and CCC bonds. A person is expected to earn 5.93% of their money in year 1 and this information is based on 4/15/2019 information. The sole purpose of this fund is to leave the money in and let it mature at year 9 so an investor would get up to 10% in earnings. American Fund has a good Morningstar rating for the 3-year performance, but they do plan on losing money in years 3 and 4 and recovering most the money by year 9. This type of fund isn’t for any longer period of 9 years because at year 10 the fund matures, and all funds are dispersed or reinvested into another account. American High-Income Trust (3/31/2019) The kind of people who would invest like this are the moderate investors because they can take risk but not such a big risk, they aren’t able to recover the funds invested. They would be able to use that money to secure money in the future but not more than 9 years.

Balanced Funds

Balanced mutual funds are investments in both bonds, which are centered on generating income and in stocks, which target investment growth. The bond portion mitigates the risks associated with the stock side of the investment, and that is why it is called a balanced investment (“Vanguard Personal Investors”, 2019).

International Funds

These funds diversify a US based portfolio because it gives the investor access to hundreds of foreign securities that would help spread the risk of owning only domestic stocks. Generally, it is suggested that one hold at least 20% of the mutual fund portfolio in international stocks and bonds (“Vanguard Personal Investors”, 2019).

Retirement Investing

The fund that I choose is retirement investing with Vanguard. Vanguard has target retirement funds. You can choose how to invest your money in one fund. It also allows you to minimize your risk while maximizing growth. The more you are diversified the lower the risk of loss is. With this type of fund, you can invest in US or international stocks and bonds. These funds have managers that handle your asset mix so that you don’t have to worry about it. These funds also have low cost with means you have more money in your account working hard for you to reach your goals.

Vanguard (n.d) Retrieved from https://investor.vanguard.com/mutual-funds/profile/portfolio/vtsmx

American High-Income Trust (03/31/2019) Retrieved from http:// Americanfunds.com/advisor/investment /fund/ahifx