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Is Vanguard Strategic Small Cap Equity (VSTCX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Small Cap Blend fund category, a potential starting could be Vanguard Strategic Small Cap Equity (VSTCX - Free Report) . VSTCX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VSTCX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VSTCX. Vanguard Strategic Small Cap Equity made its debut in April of 2006, and since then, VSTCX has accumulated about $1.42 billion in assets, per the most up-to-date date available. The fund is currently managed by James P. Stetler who has been in charge of the fund since April of 2006.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 13.43%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10%, which places it in the middle 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. Compared to the category average of 25.73%, the standard deviation of VSTCX over the past three years is 27.16%. The fund's standard deviation over the past 5 years is 22.4% compared to the category average of 21.17%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.34, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -6.69, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VSTCX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1.11%. Looking at the fund from a cost perspective, VSTCX is actually cheaper than its peers.
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 Strategic Small Cap Equity ( VSTCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Strategic Small Cap Equity ( VSTCX ) looks like a somewhat average choice for investors right now.
For additional information on the Small Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VSTCX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Vanguard Strategic Small Cap Equity (VSTCX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Small Cap Blend fund category, a potential starting could be Vanguard Strategic Small Cap Equity (VSTCX - Free Report) . VSTCX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VSTCX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VSTCX. Vanguard Strategic Small Cap Equity made its debut in April of 2006, and since then, VSTCX has accumulated about $1.42 billion in assets, per the most up-to-date date available. The fund is currently managed by James P. Stetler who has been in charge of the fund since April of 2006.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 13.43%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10%, which places it in the middle 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. Compared to the category average of 25.73%, the standard deviation of VSTCX over the past three years is 27.16%. The fund's standard deviation over the past 5 years is 22.4% compared to the category average of 21.17%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.34, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -6.69, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VSTCX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1.11%. Looking at the fund from a cost perspective, VSTCX is actually cheaper than its peers.
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 Strategic Small Cap Equity ( VSTCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Strategic Small Cap Equity ( VSTCX ) looks like a somewhat average choice for investors right now.
For additional information on the Small Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VSTCX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.