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Is Vanguard Dividend Appreciation Index Admiral (VDADX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Large Cap Blend fund? Starting with Vanguard Dividend Appreciation Index Admiral (VDADX - Free Report) is one possibility. VDADX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDADX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDADX. Since Vanguard Dividend Appreciation Index Admiral made its debut in December of 2013, VDADX has garnered more than $10.70 billion in assets. Walter Nejman is the fund's current manager and has held that role since May of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 14.15%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.16%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of VDADX over the past three years is 16.42% compared to the category average of 16.77%. The standard deviation of the fund over the past 5 years is 13.38% compared to the category average of 14.34%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.85, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VDADX has generated a positive alpha over the past five years of 1.94, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
Right now, 90.58% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $206.55 billion. The fund has the heaviest exposure to the following market sectors:
Non-Durable
Technology
Retail Trade
Industrial Cyclical
Health
Turnover is 14%, which means, on average, the fund makes fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VDADX is a no load fund. It has an expense ratio of 0.08% compared to the category average of 0.97%. VDADX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Dividend Appreciation Index Admiral ( VDADX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Dividend Appreciation Index Admiral ( VDADX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Vanguard Dividend Appreciation Index Admiral (VDADX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Blend fund? Starting with Vanguard Dividend Appreciation Index Admiral (VDADX - Free Report) is one possibility. VDADX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDADX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDADX. Since Vanguard Dividend Appreciation Index Admiral made its debut in December of 2013, VDADX has garnered more than $10.70 billion in assets. Walter Nejman is the fund's current manager and has held that role since May of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 14.15%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 13.16%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. The standard deviation of VDADX over the past three years is 16.42% compared to the category average of 16.77%. The standard deviation of the fund over the past 5 years is 13.38% compared to the category average of 14.34%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.85, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VDADX has generated a positive alpha over the past five years of 1.94, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
Right now, 90.58% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $206.55 billion. The fund has the heaviest exposure to the following market sectors:
- Non-Durable
- Technology
- Retail Trade
- Industrial Cyclical
- Health
Turnover is 14%, which means, on average, the fund makes fewer trades than comparable funds.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VDADX is a no load fund. It has an expense ratio of 0.08% compared to the category average of 0.97%. VDADX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Dividend Appreciation Index Admiral ( VDADX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Dividend Appreciation Index Admiral ( VDADX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.