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Is Vanguard Tax-Managed Small Cap Investor (VTMSX) a Strong Mutual Fund Pick Right Now?
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Small Cap Blend fund seekers should consider taking a look at Vanguard Tax-Managed Small Cap Investor (VTMSX - Free Report) . VTMSX possesses 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 VTMSX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTMSX. Since Vanguard Tax-Managed Small Cap Investor made its debut in April of 1999, VTMSX has garnered more than $5.95 billion in assets. The fund's current manager, William A. Coleman, has been in charge of the fund since April of 2016.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 9.33%, and it sits 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 12.05%, 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. VTMSX's standard deviation over the past three years is 14.62% compared to the category average of 11.5%. Over the past 5 years, the standard deviation of the fund is 13.96% compared to the category average of 11.46%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VTMSX lost 50.89% in the most recent bear market and outperformed its peer group by 1.56%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.07, which means it is hypothetically more 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. VTMSX has generated a negative alpha over the past five years of -1.85, demonstrating 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, VTMSX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 1.08%. Looking at the fund from a cost perspective, VTMSX is actually cheaper than its peers.
This fund requires a minimum initial investment of $10,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Small Cap Blend 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 VTMSX to its peers 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 Tax-Managed Small Cap Investor (VTMSX) a Strong Mutual Fund Pick Right Now?
Small Cap Blend fund seekers should consider taking a look at Vanguard Tax-Managed Small Cap Investor (VTMSX - Free Report) . VTMSX possesses 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 VTMSX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTMSX. Since Vanguard Tax-Managed Small Cap Investor made its debut in April of 1999, VTMSX has garnered more than $5.95 billion in assets. The fund's current manager, William A. Coleman, has been in charge of the fund since April of 2016.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 9.33%, and it sits 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 12.05%, 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. VTMSX's standard deviation over the past three years is 14.62% compared to the category average of 11.5%. Over the past 5 years, the standard deviation of the fund is 13.96% compared to the category average of 11.46%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VTMSX lost 50.89% in the most recent bear market and outperformed its peer group by 1.56%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.07, which means it is hypothetically more 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. VTMSX has generated a negative alpha over the past five years of -1.85, demonstrating 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, VTMSX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 1.08%. Looking at the fund from a cost perspective, VTMSX is actually cheaper than its peers.
This fund requires a minimum initial investment of $10,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Small Cap Blend 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 VTMSX to its peers 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.