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Is Vanguard Equity Income Fund Admiral (VEIRX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Large Cap Value funds, consider Vanguard Equity Income Fund Admiral (VEIRX - Free Report) as a possibility. VEIRX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VEIRX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Equity Income Fund Admiral made its debut in August of 2001, VEIRX has garnered more than $25.26 billion in assets. The fund's current manager, a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 14.59%, and is 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 11.12%, 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. Over the past three years, VEIRX's standard deviation comes in at 9.29%, compared to the category average of 9.59%. The fund's standard deviation over the past 5 years is 9.01% compared to the category average of 9.89%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. VEIRX lost 48.76% in the most recent bear market and outperformed its peer group by 1.4%. This could mean that the fund is a better choice than comparable funds during a bear market.

Investors should note that the fund has a 5-year beta of 0.92, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VEIRX has generated a positive alpha over the past five years of 0.15, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, VEIRX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 1.04%. From a cost perspective, VEIRX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $50,000; each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Equity Income Fund Admiral 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 VEIRX in the Large Cap Value 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. 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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