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Is Vanguard Capital Opportunity Investor (VHCOX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Large Cap Growth funds, a place to start could be Vanguard Capital Opportunity Investor (VHCOX - Free Report) . VHCOX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VHCOX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
VHCOX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Capital Opportunity Investor made its debut in August of 1995 and VHCOX has managed to accumulate roughly $16.53 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 20.61%, 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 13.57%, 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 VHCOX over the past three years is 12.39% compared to the category average of 10.07%. Over the past 5 years, the standard deviation of the fund is 11.86% compared to the category average of 10.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VHCOX lost 49.21% in the most recent bear market and underperformed comparable funds by 0.33%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 39.09% in what was its worst calendar year in a decade.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more 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. VHCOX has generated a positive alpha over the past five years of 4.23, demonstrating that managers in this portfolio are skilled in picking 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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 96.60% stock in stocks, with an average market capitalization of $92.70 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Health
Turnover is 10%, which means this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VHCOX is a no load fund. It has an expense ratio of 0.44% compared to the category average of 1.14%. VHCOX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Capital Opportunity Investor VHCOX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VHCOX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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 Capital Opportunity Investor (VHCOX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Large Cap Growth funds, a place to start could be Vanguard Capital Opportunity Investor (VHCOX - Free Report) . VHCOX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VHCOX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
VHCOX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Capital Opportunity Investor made its debut in August of 1995 and VHCOX has managed to accumulate roughly $16.53 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 20.61%, 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 13.57%, 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 VHCOX over the past three years is 12.39% compared to the category average of 10.07%. Over the past 5 years, the standard deviation of the fund is 11.86% compared to the category average of 10.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VHCOX lost 49.21% in the most recent bear market and underperformed comparable funds by 0.33%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 39.09% in what was its worst calendar year in a decade.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more 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. VHCOX has generated a positive alpha over the past five years of 4.23, demonstrating that managers in this portfolio are skilled in picking 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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 96.60% stock in stocks, with an average market capitalization of $92.70 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 10%, which means this fund makes fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VHCOX is a no load fund. It has an expense ratio of 0.44% compared to the category average of 1.14%. VHCOX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Capital Opportunity Investor VHCOX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VHCOX in the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.