Time Series Models to Predict the NAV of an Asset Allocation Mutual Fund VWELX

This research examines the use of various forms of time series models to predict the NAV of an asset allocation mutual fund. In particular, the mutual fund case used is the Vanguard Wellington Fund. This fund maintains a balance between relatively conservative stocks and bonds. The period of the study on which the prediction of the NAV is based is the 24-month period of 2010 through 2011, and the forecasting period is the first three months of 2012. Forecasting the NAV of a massive conservative allocation fund, composed of an extremely large number of investments, requires a method that produces accurate results. Achieving this accuracy has no necessary relationship to the complexity of the variety of the methods typically present in many financial forecasting studies