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Is Vanguard Materials Index Administrative (VMIAX) a Strong Mutual Fund Pick Right Now?
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On the lookout for a Mid Cap Blend fund? Starting with Vanguard Materials Index Administrative (VMIAX - Free Report) is one possibility. VMIAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Mid Cap Blend mutual funds is an area filled with options, such as VMIAX. Mid Cap Blend funds expose investors to value picks, income opportunities, and exciting growth potential, but also gives some stability; these funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with market capitalization in the range of $2 billion to $10 billion.
History of Fund/Manager
VMIAX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Materials Index Administrative made its debut in January of 2004, and since then, VMIAX has accumulated about $485.81 million in assets, per the most up-to-date date available. William A. Coleman is the fund's current manager and has held that role since August of 2015.
Performance
Of course, investors look for strong performance in funds. VMIAX has a 5-year annualized total return of 12.23% and it sits in the middle 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 12.85%, 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. Compared to the category average of 11.72%, the standard deviation of VMIAX over the past three years is 16.54%. The standard deviation of the fund over the past 5 years is 14.45% compared to the category average of 11.48%. This makes the fund more 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, VMIAX lost 56.1% and underperformed its peer group by 4.94%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.25, the fund is likely to be more volatile than 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 negative alpha over the past 5 years of -6.19, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VMIAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.11%. So, VMIAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $100,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Materials Index Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Materials Index Administrative looks like a great potential choice for investors right now.
This could just be the start of your research on VMIAX in the Mid Cap Blend 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Materials Index Administrative (VMIAX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Mid Cap Blend fund? Starting with Vanguard Materials Index Administrative (VMIAX - Free Report) is one possibility. VMIAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Mid Cap Blend mutual funds is an area filled with options, such as VMIAX. Mid Cap Blend funds expose investors to value picks, income opportunities, and exciting growth potential, but also gives some stability; these funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with market capitalization in the range of $2 billion to $10 billion.
History of Fund/Manager
VMIAX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Materials Index Administrative made its debut in January of 2004, and since then, VMIAX has accumulated about $485.81 million in assets, per the most up-to-date date available. William A. Coleman is the fund's current manager and has held that role since August of 2015.
Performance
Of course, investors look for strong performance in funds. VMIAX has a 5-year annualized total return of 12.23% and it sits in the middle 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 12.85%, 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. Compared to the category average of 11.72%, the standard deviation of VMIAX over the past three years is 16.54%. The standard deviation of the fund over the past 5 years is 14.45% compared to the category average of 11.48%. This makes the fund more 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, VMIAX lost 56.1% and underperformed its peer group by 4.94%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.25, the fund is likely to be more volatile than 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 negative alpha over the past 5 years of -6.19, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VMIAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.11%. So, VMIAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $100,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Materials Index Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Materials Index Administrative looks like a great potential choice for investors right now.
This could just be the start of your research on VMIAX in the Mid Cap Blend 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.