Vanguard Star Fund (VGSTX)

There are several well-known balanced funds offered by Vanguard Group Inc. They are Vanguard Wellesley fund, Vanguard Wellington Fund, and Vanguard Star fund. These funds are popular among the long term investor. I’ll review the Vanguard Star fund for this article. This Vanguard Star fund is known as fund of funds.

Vanguard Star Fund (VGSTX)

The investment aim of Vanguard Star Fund is to provide long-term capital appreciation and income. This hybrid fund invests in a diversified group of other Vanguard mutual funds, rather than in individual stocks or bonds. This Vanguard fund uses a balanced investment approach by investing 60% to 70% of assets in common stocks through eight stock funds; 20% to 30% of assets in bonds through 2 bond funds; and 10% to 20% of assets in short-term investments through a short-term bond fund.

Fund Details
Vanguard Star Fund
  • Fund Inception Date: 03/29/1985
  • Ticker Symbol: VGSTX
  • CUSIP: 921909602
  • Beta (3yr): 1.07
  • Rank in category (2011): 37%
  • Category: Moderate Allocation 
  • Distribution Rate: 2.55%
  • Capital Gains: 0%
  • Expense Ratio: 0.00%  
  • Net Assets: $ 13.60 billion
  • Number of Years Up: 22 years
  • Number of Years Down: 4 years
  • Annual Turnover Rate: 24%
Updated on 1/24/2012

This Vanguard fund is currently managed by Duane F. Kelly. He started managing this fund since July 2009. This top rated balanced fund has total net assets of $13.60 billion. The dividend yield of this fund is 2.55%. The latest distribution was done on December 2011 ($0.19). This fund has annual expense ratio of 0.00%. The average annual expense ratio in the Moderate Allocation category is 0.99%. The 3-year beta of this fund is 1.07. This actively managed fund doesn't have a 12b1 fee and a front-end sales load fee.

Since its inception in 1985, this fund has returned in 22 years of positive return and 4 years of negative return. The best return so far was achieved in 2009 with 24.85%. This fund has YTD return of 0.77% and the 5-year average return is 2.33%. Based on the load adjusted return, this moderate allocation balanced fund has returned 12.01% over the past 3-years and 5.21% over the past decade. Morningstar has rated this fund with 4 stars rating. The Morningstar Analyst Rating is Silver rating.

This Best Vanguard fund can be purchased through 88 brokerages, such as E Trade Financial, Schwab Institutional, JP Morgan, T Rowe Price, Vanguard NTF, Royal Alliance, Raymond James, Firstrade, etc. The minimum initial investment for this fund is $1,000. This applies for both brokerage and IRA account. This fund has minimum subsequent investment of $100.

The asset allocation of this Vanguard fund as of November 2011 is Stocks (63.39%), Bonds (24.34%) and Short-term reserves (12.27%). The benchmarks of this VGSTX fund are STAR Composite Index and Dow Jones U.S. Total Stock Market Index.

The top 5 allocations to underlying funds are Vanguard Windsor II Fund Investor Shares (Symbol: VWNFX) (14.3%), Vanguard Short-Term Investment-Grade Fund Investor Shares (12.3%), Vanguard GNMA Fund Investor Shares (12.3%), Vanguard Long-Term Investment-Grade Investor Shares (12.0%) and Vanguard International Value Fund (9.6%).

Disclosure: No Position

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