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Is Vanguard Consumer Discret Index Admiral (VCDAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Large Cap Growth fund? Vanguard Consumer Discret Index Admiral (VCDAX - Free Report) is a potential starting point. 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
VCDAX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
VCDAX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Consumer Discret Index Admiral made its debut in January of 2004 and VCDAX has managed to accumulate roughly $299.39 million in assets, as of the most recently available information. The fund's current manager, Michael A. Johnson, has been in charge of the fund since December of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.7%, and is 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 14.34%, 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 13.79% compared to the category average of 13.01%. Looking at the past 5 years, the fund's standard deviation is 13.65% compared to the category average of 12.62%. 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 the most recent bear market, VCDAX lost 53.95% and underperformed its peer group by 5.11%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 1.12, 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. VCDAX has generated a negative alpha over the past five years of -0.3, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.85% of its assets in stocks, which have an average market capitalization of $280.46 billion. The fund has the heaviest exposure to the following market sectors:
Retail Trade
Non-Durable
Consumer Durables
With turnover at about 28%, this fund is making fewer trades than its comparable peers.
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 1.05%. So, VCDAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Consumer Discret Index Admiral ( VCDAX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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 Admiral (VCDAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Growth fund? Vanguard Consumer Discret Index Admiral (VCDAX - Free Report) is a potential starting point. 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
VCDAX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
VCDAX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Consumer Discret Index Admiral made its debut in January of 2004 and VCDAX has managed to accumulate roughly $299.39 million in assets, as of the most recently available information. The fund's current manager, Michael A. Johnson, has been in charge of the fund since December of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.7%, and is 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 14.34%, 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 13.79% compared to the category average of 13.01%. Looking at the past 5 years, the fund's standard deviation is 13.65% compared to the category average of 12.62%. 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 the most recent bear market, VCDAX lost 53.95% and underperformed its peer group by 5.11%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 1.12, 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. VCDAX has generated a negative alpha over the past five years of -0.3, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 primarily on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.85% of its assets in stocks, which have an average market capitalization of $280.46 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
- Non-Durable
- Consumer Durables
With turnover at about 28%, this fund is making fewer trades than its comparable peers.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 1.05%. So, VCDAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Consumer Discret Index Admiral ( VCDAX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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.