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The Vanguard Star Fund (VGSTX) Review

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The Vanguard Star Fund Investor Shares is a balanced fund between stocks and fixed income and falls into Morningstar’s allocation – 50 to 70 percent equity category. The category includes a wide range of funds with varying strategies.

The Vanguard Star Fund (VGSTX) fund aims to create a balanced portfolio that can create steady returns.

This is achieved by investing in a mixture of stocks and domestic holdings. At present the split is 60% stock and 40% holdings. The fund currently has $22.4 billion invested across 12 different holdings.

These assets come from investments into 11 other funds owned by Vanguard.

In other words, this fund is a combination of 11 other funds, this dilutes the risk, but can also potentially dilute the rewards. The 11 funds that makeup STAR, are a mixture of 3, 4, and 5-star funds.

Does It Have Good Returns?

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Out of 30 years of trading the fund has had positive returns in 25 of those years. That is very steady going. The highest year’s return was from 1995, where the fund grew by 29%. In the current year it looks to have grown by 4%. So, the returns are generally positive. They are not astronomical, but they are better than a savings account. The results are above average for similar funds.

Is This Fund Good for Beginner Investors?

This risk associated with this fund are about average for funds of its type, so it is not an excessively high-risk option. When linked with the above average returns it does mean that this fund could be a good choice for people who are new to investing.

It is a low-cost option with an expense ratio of 0.32%. This means for first time investors there is not a large amount risk involved, if you get cold feet and want to pull out. If you have the funds to do so it is worth spreading your money across a range of funds to protect your investment. This fund would be a good steady component of a larger portfolio for a novice investor. If you’re new to investing you would benefit from A Beginner’s Guide to Investing In The Stock Market.

Does the Vanguard Star Fund have good reviews?

The majority of reviews of this fund suggest that it is a good fund, but not great. It is a relatively safe option that gives reasonable returns on funds. Vanguard is a well-respected investment company who have been pioneering the mutual fund world with low-cost passive investment strategies. It has been profitable significantly more often than it hasn’t been which in the current economic climate is an achievement.

See other review(s):

Morningstar.com Review: 4/5 stars

US News: Money Review: 8.4/10

Top Holdings

Company % Net Assets
Vanguard Windsor™ II Inv VWNFX
14.19
Vanguard Short-Term Investment-Grade Inv VFSTX
12.48
Vanguard Long-Term Investment-Grade Inv VWESX
12.48
Vanguard GNMA Inv VFIIX
12.35
Vanguard International Value Inv VTRIX
9.45
Vanguard International Growth Inv VWIGX
9.29
Vanguard Windsor™ Inv VWNDX
7.76
Vanguard PRIMECAP Inv VPMCX
6.09
Vanguard Morgan™ Growth Inv VMRGX
6.06
Vanguard US Growth Inv VWUSX
6.03

Volatility Measurements

Volitility measures reflect the uncertainty or risk of change in a security’s value.

Standard Deviation 7.009


Mean 0.77


Sharpe Ratio 1.255

Is It Too Conservative for Millennials?

This fund is not out there making bold and risky purchases, so is unlikely to net mouth-watering returns. However, it is a steady performer and the risk is not so great as to be concerning. For millennials who are worried about there being no money in the pension pot by the time they are allowed to retire, this could be a good steady investment. It is not likely to put an end to today’s money worries, however.

What Are the Minimum Purchase Requirement and How Do They Compare to Other Similar Funds?

The Minimum Investment is $1,000. Most similar funds have minimums that range from $500-$3,000, so this fund is on the lower end of the scale.

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Bottom Line:

This fund is not out there making bold and risky purchases, so is unlikely to net mouth-watering returns. However, it is a steady performer and the risk is not so great as to be concerning. For millennials who are worried about there being no money in the pension pot by the time they are allowed to retire, this could be a good steady investment. It is not likely to put an end to today’s money worries, however.
Brian Meiggs
Brian Meiggs
Brian is the founder of My Millennial Guide and is an entrepreneur who has spent the last few years creating websites and building brands. He has been quoted in several online publications, including Yahoo! Finance, NASDAQ, MSN Money, AOL, Discover Bank, GOBankingRates, Student Loan Hero, Fit Small Business, Cheapism, SmartAsset, Bankrate, RISE Credit, AllBusiness, Cheddar, Commonbond, Niche, Rewire, Credit Donkey, Debt.com, and more. He uses the free Personal Capital app to manage his cash flow and net worth.

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