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Is Vanguard Consumer Discret Index Administrative (VCDAX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Large Cap Growth fund could think about starting with Vanguard Consumer Discret Index Administrative (VCDAX - Free Report) . VCDAX 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 VCDAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VCDAX. The Vanguard Consumer Discret Index Administrative made its debut in January of 2004 and VCDAX has managed to accumulate roughly $256.85 million in assets, as of the most recently available information. Michael A. Johnson is the fund's current manager and has held that role since December of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 14.83%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.66%, 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. The standard deviation of VCDAX over the past three years is 11.66% compared to the category average of 11.83%. Over the past 5 years, the standard deviation of the fund is 12% compared to the category average of 11.36%. 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 VCDAX's case, the fund lost 53.95% in the most recent bear market and underperformed its peer group by 4.93%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VCDAX has a 5-year beta of 1.11, which means it is likely to be more volatile than the market average. 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. With a positive alpha of 0.2, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
This fund is currently holding about 85.8% stock in stocks, with an average market capitalization of $138.13 billion. The fund has the heaviest exposure to the following market sectors:
Non-Durable
Retail Trade
Technology
Consumer Durables
With turnover at about 6%, this fund is making fewer trades than comparable funds.
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, VCDAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.11%. So, VCDAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $100,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Consumer Discret Index Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VCDAX to its peers 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 Consumer Discret Index Administrative (VCDAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Growth fund could think about starting with Vanguard Consumer Discret Index Administrative (VCDAX - Free Report) . VCDAX 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 VCDAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VCDAX. The Vanguard Consumer Discret Index Administrative made its debut in January of 2004 and VCDAX has managed to accumulate roughly $256.85 million in assets, as of the most recently available information. Michael A. Johnson is the fund's current manager and has held that role since December of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 14.83%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.66%, 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. The standard deviation of VCDAX over the past three years is 11.66% compared to the category average of 11.83%. Over the past 5 years, the standard deviation of the fund is 12% compared to the category average of 11.36%. 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 VCDAX's case, the fund lost 53.95% in the most recent bear market and underperformed its peer group by 4.93%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VCDAX has a 5-year beta of 1.11, which means it is likely to be more volatile than the market average. 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. With a positive alpha of 0.2, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
This fund is currently holding about 85.8% stock in stocks, with an average market capitalization of $138.13 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 6%, this fund is making fewer trades than comparable funds.
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, VCDAX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.11%. So, VCDAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $100,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Consumer Discret Index Administrative has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VCDAX to its peers 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.