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 Value Index Admiral (VVIAX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Any investors hoping to find a Large Cap Value fund could think about starting with Vanguard Value Index Admiral (VVIAX - Free Report) . VVIAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VVIAX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VVIAX. Vanguard Value Index Admiral made its debut in November of 2000, and since then, VVIAX has accumulated about $19.24 billion in assets, per the most up-to-date date available. The fund is currently managed by Gerard C. O'Reilly who has been in charge of the fund since November of 2000.
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 9.88%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.82%, 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. The standard deviation of VVIAX over the past three years is 10.65% compared to the category average of 9.58%. Over the past 5 years, the standard deviation of the fund is 10.88% compared to the category average of 9.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. VVIAX lost 53.91% in the most recent bear market and underperformed its peer group by 3.27%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.93, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.9, which shows that 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.
This fund is currently holding about 96.41% stock in stocks, which have an average market capitalization of $150.01 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Health
Turnover is about 8%, so those in charge of the fund make fewer trades than its comparable peers.
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, VVIAX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.99%. From a cost perspective, VVIAX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Value Index Admiral ( VVIAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Large Cap Value 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 VVIAX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Value Index Admiral (VVIAX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Value fund could think about starting with Vanguard Value Index Admiral (VVIAX - Free Report) . VVIAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VVIAX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VVIAX. Vanguard Value Index Admiral made its debut in November of 2000, and since then, VVIAX has accumulated about $19.24 billion in assets, per the most up-to-date date available. The fund is currently managed by Gerard C. O'Reilly who has been in charge of the fund since November of 2000.
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 9.88%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.82%, 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. The standard deviation of VVIAX over the past three years is 10.65% compared to the category average of 9.58%. Over the past 5 years, the standard deviation of the fund is 10.88% compared to the category average of 9.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. VVIAX lost 53.91% in the most recent bear market and underperformed its peer group by 3.27%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 0.93, so investors should note that it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -0.9, which shows that 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.
This fund is currently holding about 96.41% stock in stocks, which have an average market capitalization of $150.01 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Health
Turnover is about 8%, so those in charge of the fund make fewer trades than its comparable peers.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, VVIAX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.99%. From a cost perspective, VVIAX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Value Index Admiral ( VVIAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Large Cap Value 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 VVIAX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.