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Is Vanguard Institutional Total Stock Market Plus (VITPX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Blend funds, consider Vanguard Institutional Total Stock Market Plus (VITPX - Free Report) as a possibility. VITPX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VITPX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VITPX. Vanguard Institutional Total Stock Market Plus made its debut in May of 2001, and since then, VITPX has accumulated about $36.42 billion in assets, per the most up-to-date date available. The fund's current manager, Walter Nejman, 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. VITPX has a 5-year annualized total return of 9.27% and is 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 11.58%, 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. Compared to the category average of 11.21%, the standard deviation of VITPX over the past three years is 12.1%. Over the past 5 years, the standard deviation of the fund is 12.04% compared to the category average of 11.63%. 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. In the most recent bear market, VITPX lost 50.79% and underperformed its peer group by 1.42%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.02, which means it is hypothetically as volatile as 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. With a negative alpha of -0.51, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
This fund is currently holding about 88.59% stock in stocks, with an average market capitalization of $151.09 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Turnover is about 7%, so those in charge of the fund make fewer trades than its comparable peers.
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, VITPX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.96%. So, VITPX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $100 million, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Institutional Total Stock Market Plus ( VITPX ) 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 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 VITPX too 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 Institutional Total Stock Market Plus (VITPX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Blend funds, consider Vanguard Institutional Total Stock Market Plus (VITPX - Free Report) as a possibility. VITPX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that VITPX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VITPX. Vanguard Institutional Total Stock Market Plus made its debut in May of 2001, and since then, VITPX has accumulated about $36.42 billion in assets, per the most up-to-date date available. The fund's current manager, Walter Nejman, 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. VITPX has a 5-year annualized total return of 9.27% and is 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 11.58%, 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. Compared to the category average of 11.21%, the standard deviation of VITPX over the past three years is 12.1%. Over the past 5 years, the standard deviation of the fund is 12.04% compared to the category average of 11.63%. 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. In the most recent bear market, VITPX lost 50.79% and underperformed its peer group by 1.42%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.02, which means it is hypothetically as volatile as 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. With a negative alpha of -0.51, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
This fund is currently holding about 88.59% stock in stocks, with an average market capitalization of $151.09 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
Turnover is about 7%, so those in charge of the fund make fewer trades than its comparable peers.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, VITPX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.96%. So, VITPX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $100 million, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Institutional Total Stock Market Plus ( VITPX ) 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 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 VITPX too 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.