We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Vanguard Diversified Equity Investor (VDEQX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Having trouble finding a Large Cap Blend fund? Vanguard Diversified Equity Investor (VDEQX - Free Report) is a possible starting point. VDEQX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDEQX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDEQX. The Vanguard Diversified Equity Investor made its debut in June of 2005 and VDEQX has managed to accumulate roughly $1.68 billion in assets, as of the most recently available information. William A. Coleman is the fund's current manager and has held that role since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.68%, 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 13.93%, 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. VDEQX's standard deviation over the past three years is 12.16% compared to the category average of -49.32%. The fund's standard deviation over the past 5 years is 12.24% compared to the category average of -0.03%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In VDEQX's case, the fund lost 52.19% in the most recent bear market and outperformed its peer group by 33%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.07, the fund 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 negative alpha of -1.73, managers in this portfolio find it difficult to pick 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.
Currently, this mutual fund is holding 96.83% stock in stocks and it has a negligible amount of assets in foreign securities.
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, VDEQX is a no load fund. It has an expense ratio of 0.36% compared to the category average of -52.19%. From a cost perspective, VDEQX is actually more expensive than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Diversified Equity Investor ( VDEQX ) has a neutral Zacks Mutual Fund rank, similar performance, worse downside risk, and higher fees compared to its peers.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VDEQX too 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Diversified Equity Investor (VDEQX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Blend fund? Vanguard Diversified Equity Investor (VDEQX - Free Report) is a possible starting point. VDEQX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDEQX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDEQX. The Vanguard Diversified Equity Investor made its debut in June of 2005 and VDEQX has managed to accumulate roughly $1.68 billion in assets, as of the most recently available information. William A. Coleman is the fund's current manager and has held that role since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.68%, 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 13.93%, 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. VDEQX's standard deviation over the past three years is 12.16% compared to the category average of -49.32%. The fund's standard deviation over the past 5 years is 12.24% compared to the category average of -0.03%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In VDEQX's case, the fund lost 52.19% in the most recent bear market and outperformed its peer group by 33%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 1.07, the fund 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 negative alpha of -1.73, managers in this portfolio find it difficult to pick 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.
Currently, this mutual fund is holding 96.83% stock in stocks and it has a negligible amount of assets in foreign securities.
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, VDEQX is a no load fund. It has an expense ratio of 0.36% compared to the category average of -52.19%. From a cost perspective, VDEQX is actually more expensive than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Diversified Equity Investor ( VDEQX ) has a neutral Zacks Mutual Fund rank, similar performance, worse downside risk, and higher fees compared to its peers.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VDEQX too 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.