VWIAX vs. VFORX

Last updated Jun 4, 2026

VWIAX (Vanguard Wellesley Income Fund Admiral Shares) and VFORX (Vanguard Target Retirement 2040 Fund) are both mutual funds - VWIAX is a Diversified Portfolio fund managed by Vanguard, while VFORX is a Target Retirement Date fund managed by Vanguard. Over the past 10 years, VWIAX returned 5.88%/yr vs 10.66%/yr for VFORX. A 0.78 correlation means they provide meaningful diversification when combined. VWIAX charges 0.16%/yr vs 0.08%/yr for VFORX.

Performance

VWIAX vs. VFORX - Performance Comparison

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

Returns By Period

In the year-to-date period, VWIAX achieves a 3.59% return, which is significantly lower than VFORX's 10.11% return. Over the past 10 years, VWIAX has underperformed VFORX with an annualized return of 5.88%, while VFORX has yielded a comparatively higher 10.66% annualized return.

VWIAX

• 1D: 0.30%
• 1M: 1.26%
• YTD: 3.59%
• 6M: 3.59%
• 1Y: 11.43%
• 3Y*: 8.94%
• 5Y*: 4.22%
• 10Y*: 5.88%

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%

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

VWIAX vs. VFORX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
VWIAX Vanguard Wellesley Income Fund Admiral Shares	3.59%	11.08%	5.92%	7.07%	-9.04%	8.55%	8.52%	16.47%	-2.49%	9.37%
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%

Correlation

The correlation between VWIAX and VFORX is 0.70, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.70
Correlation (3Y) Calculated over the trailing 3-year period	0.72
Correlation (5Y) Calculated over the trailing 5-year period	0.74
Correlation (10Y) Calculated over the trailing 10-year period	0.74
Correlation (All Time) Calculated using the full available price history since Jun 8, 2006	0.78

The correlation between VWIAX and VFORX has been stable across timeframes, ranging from 0.70 to 0.78 - a consistent structural relationship.

VWIAX vs. VFORX - Sectors Allocation Comparison

Sectors	VWIAX	VFORX
Financial Services	7.9%	16.1%
Healthcare	5.7%	8.3%
Technology	4.2%	27.4%
Industrials	3.6%	12.3%
Consumer Defensive	3.6%	4.8%
Utilities	3.6%	2.7%
Energy	3.1%	4.3%
Consumer Cyclical	1.9%	9.4%
Basic Materials	1.4%	4.3%
Real Estate	1.1%	2.5%
Communication Services	1.1%	8.0%

Return for Risk

VWIAX vs. VFORX — Risk / Return Rank

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

VWIAX

VWIAX Risk / Return Rank: 58
VWIAX Sharpe Ratio Rank: 61
VWIAX Sortino Ratio Rank: 63
VWIAX Omega Ratio Rank: 58
VWIAX Calmar Ratio Rank: 55
VWIAX Martin Ratio Rank: 52

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

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.

VWIAX vs. VFORX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Vanguard Wellesley Income Fund Admiral Shares (VWIAX) and Vanguard Target Retirement 2040 Fund (VFORX). 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.

	VWIAX	VFORX	Difference
Sharpe ratio: Return per unit of total volatility	2.30	2.50	-0.20
Sortino ratio: Return per unit of downside risk	3.32	3.50	-0.18
Omega ratio: Gain probability vs. loss probability	1.43	1.46	-0.04
Calmar ratio: Return relative to maximum drawdown	2.84	3.15	-0.31
Martin ratio: Return relative to average drawdown	10.69	13.90	-3.21
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

VWIAX vs. VFORX - Sharpe Ratio Comparison

The current VWIAX Sharpe Ratio is 2.30, which is comparable to the VFORX Sharpe Ratio of 2.50. The chart below compares the historical Sharpe Ratios of VWIAX and VFORX, 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

	VWIAX	VFORX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.30	2.50	-0.20
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.61	0.72	-0.11
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.85	0.78	+0.07
Sharpe Ratio (All Time) Calculated using the full available price history	0.94	0.50	+0.43

Drawdowns

VWIAX vs. VFORX - Drawdown Comparison

The maximum VWIAX drawdown since its inception was -21.64%, smaller than the maximum VFORX drawdown of -51.63%. Use the drawdown chart below to compare losses from any high point for VWIAX and VFORX.

Drawdown Indicators

	VWIAX	VFORX	Difference
Max Drawdown Largest peak-to-trough decline	-21.64%	-51.63%	+29.99%
Max Drawdown (1Y) Largest decline over 1 year	-4.15%	-7.70%	+3.55%
Max Drawdown (3Y) Largest decline over 3 years	-6.96%	-12.12%	+5.16%
Max Drawdown (5Y) Largest decline over 5 years	-15.26%	-24.32%	+9.06%
Max Drawdown (10Y) Largest decline over 10 years	-17.41%	-29.35%	+11.94%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-2.22%	-6.77%	+4.55%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.10%	1.74%	-0.64%

Volatility

VWIAX vs. VFORX - Volatility Comparison

The current volatility for Vanguard Wellesley Income Fund Admiral Shares (VWIAX) is 1.66%, while Vanguard Target Retirement 2040 Fund (VFORX) has a volatility of 2.99%. This indicates that VWIAX experiences smaller price fluctuations and is considered to be less risky than VFORX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	VWIAX	VFORX	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.66%	2.99%	-1.33%
Volatility (6M) Calculated over the trailing 6-month period	3.90%	7.78%	-3.88%
Volatility (1Y) Calculated over the trailing 1-year period	5.12%	9.71%	-4.59%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.97%	12.43%	-5.46%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.92%	13.68%	-6.76%

VWIAX vs. VFORX - Expense Ratio Comparison

VWIAX has a 0.16% expense ratio, which is higher than VFORX's 0.08% 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

VWIAX vs. VFORX - Dividend Comparison

VWIAX's dividend yield for the trailing twelve months is around 7.75%, more than VFORX's 2.51% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
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%
VWIAX Vanguard Wellesley Income Fund Admiral Shares	7.75%	7.93%	6.69%	4.80%	7.75%	6.11%	4.37%	4.00%	7.64%	3.25%	4.07%	5.66%

Frequently Asked Questions

Can I hold both VWIAX and VFORX in my portfolio?

VWIAX and VFORX have a correlation of 0.70, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, VWIAX or VFORX?

VFORX has higher volatility (2.99%) compared to VWIAX (1.66%). In terms of maximum drawdown, VWIAX dropped -21.64% vs VFORX's -51.63%.

Which has better risk-adjusted returns?

VFORX currently has the higher Sharpe Ratio (2.50 vs 2.30), 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.