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Is Vanguard Total Stock Market Index Admiral (VTSAX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Index funds, consider Vanguard Total Stock Market Index Admiral (VTSAX - Free Report) as a possibility. VTSAX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VTSAX. Vanguard Total Stock Market Index Admiral debuted in November of 2000. Since then, VTSAX has accumulated assets of about $321.18 billion, according to the most recently available information. The fund's current manager, Gerard O'Reilly, has been in charge of the fund since November of 2000.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 17.38%, 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 18.12%, 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. VTSAX's standard deviation over the past three years is 19.44% compared to the category average of 15.35%. The fund's standard deviation over the past 5 years is 15.64% compared to the category average of 12.7%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.03, so investors should note that it is hypothetically as volatile as 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. Over the past 5 years, the fund has a negative alpha of -0.49. This means 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 primarily on equities that are traded in the United States.

This fund is currently holding about 95.2% stock in stocks, which have an average market capitalization of $263.91 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Finance
  3. Retail Trade
With turnover at about 8%, this fund makes fewer trades than the average comparable fund.

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, VTSAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.79%. VTSAX 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

For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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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