Vanguard Windsor Fund (VWNFX) is a well known conservatively managed fund. Morningstar characterizes it as large value fund. The fund’s investment philosophy is to seek long-term capital appreciation and income. The fund invests mainly in mid- and large-capitalization companies whose stocks are considered by an advisor to be undervalued. Undervalued stocks are generally those that are out of favor with investors and that the advisor feels are trading at prices that are below average in relation to such measures as earnings and book value. These stocks often have above-average dividend yields. Thus, the fund can be categorized as a dividend stock fund.
As of 12/31/2012, the fund’s holdings have the following ratios:
|Median Market Cap||45.62K||53.47K|
|3 Year Earnings Growth||2.54%||0.78%|
From the above table, one can see that the fund has lower Price/Earnings (PE), P/S (Price/Sales) and Price/CashFlow than the averages of large value stock funds.
The fund has done reasonable job in the last ten years, beating both S&P 500 and the large value stock funds’ average in terms of returns. The following shows the fund’s recent performance, compared with two diversified ETF asset allocation portfolios with 0 risk profile (meaning 100% can be allocated into risk assets such as stocks):
Portfolio Performance Comparison
|Portfolio/Fund Name||1Yr AR||1Yr Sharpe||3Yr AR||3Yr Sharpe||5Yr AR||5Yr Sharpe|
|Retirement Income ETFs Strategic Asset Allocation Risk Profile 0||1%||12%||29%||111%||2%||1%|
|Retirement Income ETFs Tactical Asset Allocation Risk Profile 0||-1%||1%||14%||69%||10%||43%|
Three Year Chart
Unfortunately, the fund lagged even the strategic asset allocation portfolio in the last 5 years. The fund did OK in the last one year period.
The following are the top holdings of the fund:
The takeaway is that the fund is worth watching, given its long term performance. However, recent performance has been lackluster.