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Is Vanguard Windsor-II Admiral (VWNAX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Large Cap Value fund could think about starting with Vanguard Windsor-II Admiral (VWNAX - Free Report) . VWNAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWNAX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds'high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWNAX. Vanguard Windsor-II Admiral made its debut in May of 2001, and since then, VWNAX has accumulated about $43.14 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 15.67%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 17.5%, 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. Compared to the category average of 17.69%, the standard deviation of VWNAX over the past three years is 20.33%. The fund's standard deviation over the past 5 years is 16.48% compared to the category average of 14.52%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. 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. VWNAX has generated a negative alpha over the past five years of -2.47, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 91.51% of its assets in stocks, with an average market capitalization of $297.13 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Turnover is 61%, which means this fund makes fewer trades than the average comparable fund.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWNAX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1%. So, VWNAX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Windsor-II Admiral ( VWNAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Windsor-II Admiral ( VWNAX ) looks like a good potential choice for investors right now.
For additional information on the Large Cap Value 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 VWNAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Windsor-II Admiral (VWNAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Value fund could think about starting with Vanguard Windsor-II Admiral (VWNAX - Free Report) . VWNAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWNAX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds'high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWNAX. Vanguard Windsor-II Admiral made its debut in May of 2001, and since then, VWNAX has accumulated about $43.14 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 15.67%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 17.5%, 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. Compared to the category average of 17.69%, the standard deviation of VWNAX over the past three years is 20.33%. The fund's standard deviation over the past 5 years is 16.48% compared to the category average of 14.52%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.06, the fund is likely to be more volatile than the market average. 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. VWNAX has generated a negative alpha over the past five years of -2.47, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 91.51% of its assets in stocks, with an average market capitalization of $297.13 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
Turnover is 61%, which means this fund makes fewer trades than the average comparable fund.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWNAX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1%. So, VWNAX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Windsor-II Admiral ( VWNAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Windsor-II Admiral ( VWNAX ) looks like a good potential choice for investors right now.
For additional information on the Large Cap Value 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 VWNAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.