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Is Vanguard Utilities Index Administrative (VUIAX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Sector - Utilities category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Utilities Index Administrative (VUIAX - Free Report) . VUIAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VUIAX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.
History of Fund/Manager
VUIAX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Utilities Index Administrative made its debut in January of 2004 and VUIAX has managed to accumulate roughly $792.96 million in assets, as of the most recently available information. The fund is currently managed by Michael A. Johnson who has been in charge of the fund since August of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.32%, and is 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 8.42%, 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, VUIAX's standard deviation comes in at 12.91%, compared to the category average of 11.25%. The fund's standard deviation over the past 5 years is 13.55% compared to the category average of 11.63%. 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, VUIAX lost 38.05% and outperformed comparable funds by 5.32%. This might suggest that the fund is a better choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 0.27, so investors should note that it is hypothetically less volatile than 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. VUIAX's 5-year performance has produced a positive alpha of 6.22, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VUIAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.23%. Looking at the fund from a cost perspective, VUIAX is actually cheaper than its peers.
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 Utilities Index Administrative 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 VUIAXin the Sector - Utilities 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. 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 Utilities Index Administrative (VUIAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector - Utilities category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Utilities Index Administrative (VUIAX - Free Report) . VUIAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VUIAX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.
History of Fund/Manager
VUIAX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Utilities Index Administrative made its debut in January of 2004 and VUIAX has managed to accumulate roughly $792.96 million in assets, as of the most recently available information. The fund is currently managed by Michael A. Johnson who has been in charge of the fund since August of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.32%, and is 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 8.42%, 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, VUIAX's standard deviation comes in at 12.91%, compared to the category average of 11.25%. The fund's standard deviation over the past 5 years is 13.55% compared to the category average of 11.63%. 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, VUIAX lost 38.05% and outperformed comparable funds by 5.32%. This might suggest that the fund is a better choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 0.27, so investors should note that it is hypothetically less volatile than 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. VUIAX's 5-year performance has produced a positive alpha of 6.22, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VUIAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.23%. Looking at the fund from a cost perspective, VUIAX is actually cheaper than its peers.
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 Utilities Index Administrative 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 VUIAXin the Sector - Utilities 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. 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.