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Is Vanguard 500 Index Investor (VFINX) a Strong Mutual Fund Pick Right Now?
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Any investors who are searching for Mutual Fund Equity Report funds should take a look at Vanguard 500 Index Investor (VFINX - Free Report) . VFINX 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
VFINX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard 500 Index Investor made its debut in August of 1976, VFINX has garnered more than $3.23 billion in assets. The fund's current manager, Donald Butler, has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. VFINX has a 5-year annualized total return of 9.39% and it sits 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 9.73%, 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 18.48%, the standard deviation of VFINX over the past three years is 21.47%. Looking at the past 5 years, the fund's standard deviation is 18.77% compared to the category average of 16.25%. 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, so it is likely going to be as volatile as 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. VFINX has generated a negative alpha over the past five years of -0.11, demonstrating that managers in this portfolio find it difficult to pick 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.
The mutual fund currently has 98.98% of its holdings in stocks, with an average market capitalization of $248.78 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
With turnover at about 2%, this fund makes fewer trades than its comparable peers.
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, VFINX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.78%. VFINX 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 $0 and that each subsequent investment has no minimum amount.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Vanguard 500 Index Investor (VFINX) a Strong Mutual Fund Pick Right Now?
Any investors who are searching for Mutual Fund Equity Report funds should take a look at Vanguard 500 Index Investor (VFINX - Free Report) . VFINX 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
VFINX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard 500 Index Investor made its debut in August of 1976, VFINX has garnered more than $3.23 billion in assets. The fund's current manager, Donald Butler, has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. VFINX has a 5-year annualized total return of 9.39% and it sits 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 9.73%, 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 18.48%, the standard deviation of VFINX over the past three years is 21.47%. Looking at the past 5 years, the fund's standard deviation is 18.77% compared to the category average of 16.25%. 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, so it is likely going to be as volatile as 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. VFINX has generated a negative alpha over the past five years of -0.11, demonstrating that managers in this portfolio find it difficult to pick 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.
The mutual fund currently has 98.98% of its holdings in stocks, with an average market capitalization of $248.78 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
With turnover at about 2%, this fund makes fewer trades than its comparable peers.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, VFINX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.78%. VFINX 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 $0 and that each subsequent investment has no minimum amount.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.