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Is Vanguard PRIMECAP Fund Adm (VPMAX) 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 PRIMECAP Fund Adm (VPMAX - Free Report) . VPMAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VPMAX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VPMAX. Vanguard PRIMECAP Fund Adm debuted in November of 2001. Since then, VPMAX has accumulated assets of about $52.10 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 17.18%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.13%, 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 10.07%, the standard deviation of VPMAX over the past three years is 11.76%. Looking at the past 5 years, the fund's standard deviation is 10.76% compared to the category average of 10.91%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VPMAX lost 44.27% and outperformed its peer group by 4.61%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.03, the fund is likely to be as volatile as the market average. 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. The fund has produced a positive alpha over the past 5 years of 1.4, which shows that managers in this portfolio are skilled in picking 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 largely on equities that are traded in the United States.
This fund is currently holding about 94.64% stock in stocks, which have an average market capitalization of $134.16 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Health
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, VPMAX is a no load fund. It has an expense ratio of 0.32% compared to the category average of 1.14%. From a cost perspective, VPMAX is actually cheaper than its peers.
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 PRIMECAP Fund Adm VPMAX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard PRIMECAP Fund Adm ( VPMAX ) looks like a good potential choice for investors right now.
Want even more information about VPMAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 PRIMECAP Fund Adm (VPMAX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Large Cap Growth funds, a place to start could be Vanguard PRIMECAP Fund Adm (VPMAX - Free Report) . VPMAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VPMAX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VPMAX. Vanguard PRIMECAP Fund Adm debuted in November of 2001. Since then, VPMAX has accumulated assets of about $52.10 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 17.18%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.13%, 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 10.07%, the standard deviation of VPMAX over the past three years is 11.76%. Looking at the past 5 years, the fund's standard deviation is 10.76% compared to the category average of 10.91%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VPMAX lost 44.27% and outperformed its peer group by 4.61%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.03, the fund is likely to be as volatile as the market average. 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. The fund has produced a positive alpha over the past 5 years of 1.4, which shows that managers in this portfolio are skilled in picking 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 largely on equities that are traded in the United States.
This fund is currently holding about 94.64% stock in stocks, which have an average market capitalization of $134.16 billion. The fund has the heaviest exposure to the following market sectors:
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, VPMAX is a no load fund. It has an expense ratio of 0.32% compared to the category average of 1.14%. From a cost perspective, VPMAX is actually cheaper than its peers.
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 PRIMECAP Fund Adm VPMAX has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard PRIMECAP Fund Adm ( VPMAX ) looks like a good potential choice for investors right now.
Want even more information about VPMAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.