VFORX vs. VBIAX

Last updated Jun 4, 2026

VFORX (Vanguard Target Retirement 2040 Fund) and VBIAX (Vanguard Balanced Index Fund Admiral Shares) are both mutual funds - VFORX is a Target Retirement Date fund managed by Vanguard, while VBIAX is a Diversified Portfolio fund tracking the 60% CRSP US Total Market Index / 40% Bloomberg U.S. Aggregate Float Adjusted Index. Over the past 10 years, VFORX returned 10.66%/yr vs 9.83%/yr for VBIAX. With a 0.97 correlation, they move nearly in lockstep. VFORX charges 0.08%/yr vs 0.07%/yr for VBIAX.

Performance

VFORX vs. VBIAX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Vanguard Target Retirement 2040 Fund (VFORX) and Vanguard Balanced Index Fund Admiral Shares (VBIAX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, VFORX achieves a 10.11% return, which is significantly higher than VBIAX's 7.35% return. Over the past 10 years, VFORX has outperformed VBIAX with an annualized return of 10.66%, while VBIAX has yielded a comparatively lower 9.83% annualized return.

VFORX

• 1D: 0.31%
• 1M: 4.40%
• YTD: 10.11%
• 6M: 10.85%
• 1Y: 23.95%
• 3Y*: 17.28%
• 5Y*: 8.86%
• 10Y*: 10.66%

VBIAX

• 1D: 0.15%
• 1M: 3.71%
• YTD: 7.35%
• 6M: 7.26%
• 1Y: 19.35%
• 3Y*: 15.04%
• 5Y*: 8.01%
• 10Y*: 9.83%

*Multi-year figures are annualized to reflect compound growth (CAGR)

VFORX vs. VBIAX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VFORX Vanguard Target Retirement 2040 Fund	10.11%	18.77%	12.90%	18.56%	-17.00%	14.55%	15.48%	23.86%	-7.32%	18.45%
VBIAX Vanguard Balanced Index Fund Admiral Shares	7.35%	13.61%	14.58%	17.54%	-16.90%	14.21%	16.40%	21.78%	-2.86%	13.89%

Correlation

The correlation between VFORX and VBIAX is 0.97 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.97
Correlation (3Y) Calculated over the trailing 3-year period	0.96
Correlation (5Y) Calculated over the trailing 5-year period	0.96
Correlation (10Y) Calculated over the trailing 10-year period	0.96
Correlation (All Time) Calculated using the full available price history since Jun 8, 2006	0.97

The correlation between VFORX and VBIAX has been stable across timeframes, ranging from 0.96 to 0.97 - a consistent structural relationship.

VFORX vs. VBIAX - Sectors Allocation Comparison

Sectors	VFORX	VBIAX
Technology	27.4%	33.5%
Financial Services	16.1%	12.0%
Industrials	12.3%	9.8%
Consumer Cyclical	9.4%	10.0%
Healthcare	8.3%	9.2%
Communication Services	8.0%	10.3%
Consumer Defensive	4.8%	4.7%
Energy	4.3%	3.7%
Basic Materials	4.3%	2.0%
Utilities	2.7%	2.3%
Real Estate	2.5%	2.4%

Return for Risk

VFORX vs. VBIAX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

VFORX

VFORX Risk / Return Rank: 71
VFORX Sharpe Ratio Rank: 74
VFORX Sortino Ratio Rank: 71
VFORX Omega Ratio Rank: 69
VFORX Calmar Ratio Rank: 67
VFORX Martin Ratio Rank: 73

VBIAX

VBIAX Risk / Return Rank: 76
VBIAX Sharpe Ratio Rank: 76
VBIAX Sortino Ratio Rank: 74
VBIAX Omega Ratio Rank: 70
VBIAX Calmar Ratio Rank: 75
VBIAX Martin Ratio Rank: 83

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

VFORX vs. VBIAX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Target Retirement 2040 Fund (VFORX) and Vanguard Balanced Index Fund Admiral Shares (VBIAX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

	VFORX	VBIAX	Difference
Sharpe ratio: Return per unit of total volatility	2.50	2.52	-0.02
Sortino ratio: Return per unit of downside risk	3.50	3.59	-0.09
Omega ratio: Gain probability vs. loss probability	1.46	1.47	0.00
Calmar ratio: Return relative to maximum drawdown	3.15	3.42	-0.27
Martin ratio: Return relative to average drawdown	13.90	15.60	-1.70
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VFORX vs. VBIAX - Sharpe Ratio Comparison

The current VFORX Sharpe Ratio is 2.50, which is comparable to the VBIAX Sharpe Ratio of 2.52. The chart below compares the historical Sharpe Ratios of VFORX and VBIAX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	VFORX	VBIAX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.50	2.52	-0.02
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.72	0.73	-0.01
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.78	0.88	-0.10
Sharpe Ratio (All Time) Calculated using the full available price history	0.50	0.64	-0.14

Drawdowns

VFORX vs. VBIAX - Drawdown Comparison

The maximum VFORX drawdown since its inception was -51.63%, which is greater than VBIAX's maximum drawdown of -35.90%. Use the drawdown chart below to compare losses from any high point for VFORX and VBIAX.

Drawdown Indicators

	VFORX	VBIAX	Difference
Max Drawdown Largest peak-to-trough decline	-51.63%	-35.90%	-15.73%
Max Drawdown (1Y) Largest decline over 1 year	-7.70%	-5.83%	-1.87%
Max Drawdown (3Y) Largest decline over 3 years	-12.12%	-11.70%	-0.42%
Max Drawdown (5Y) Largest decline over 5 years	-24.32%	-21.53%	-2.79%
Max Drawdown (10Y) Largest decline over 10 years	-29.35%	-22.78%	-6.57%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-6.77%	-4.44%	-2.33%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.74%	1.27%	+0.47%

Volatility

VFORX vs. VBIAX - Volatility Comparison

Vanguard Target Retirement 2040 Fund (VFORX) has a higher volatility of 2.99% compared to Vanguard Balanced Index Fund Admiral Shares (VBIAX) at 2.26%. This indicates that VFORX's price experiences larger fluctuations and is considered to be riskier than VBIAX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VFORX	VBIAX	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.99%	2.26%	+0.73%
Volatility (6M) Calculated over the trailing 6-month period	7.78%	6.11%	+1.67%
Volatility (1Y) Calculated over the trailing 1-year period	9.71%	7.90%	+1.81%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	12.43%	11.05%	+1.38%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	13.68%	11.21%	+2.47%

VFORX vs. VBIAX - Expense Ratio Comparison

VFORX has a 0.08% expense ratio, which is higher than VBIAX's 0.07% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

VFORX vs. VBIAX - Dividend Comparison

VFORX's dividend yield for the trailing twelve months is around 2.51%, less than VBIAX's 5.21% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
VBIAX Vanguard Balanced Index Fund Admiral Shares	5.21%	6.00%	5.27%	4.35%	2.83%	3.19%	2.65%	2.28%	2.32%	1.95%	2.09%	2.09%
VFORX Vanguard Target Retirement 2040 Fund	2.51%	2.77%	2.86%	2.38%	2.60%	20.68%	2.06%	2.28%	2.58%	0.04%	2.40%	2.99%

Frequently Asked Questions

Can I hold both VFORX and VBIAX in my portfolio?

With a correlation of 0.97, VFORX and VBIAX move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, VFORX or VBIAX?

VFORX has higher volatility (2.99%) compared to VBIAX (2.26%). In terms of maximum drawdown, VFORX dropped -51.63% vs VBIAX's -35.90%.

Which has better risk-adjusted returns?

VBIAX currently has the higher Sharpe Ratio (2.52 vs 2.50), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.