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Is Vanguard Explorer Fund Investor (VEXPX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Small Cap Growth fund? Vanguard Explorer Fund Investor (VEXPX - Free Report) is a potential starting point. VEXPX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as VEXPX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXPX. Vanguard Explorer Fund Investor made its debut in December of 1967, and since then, VEXPX has accumulated about $3.68 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.42%, and it sits in the middle 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 16%, 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 VEXPX over the past three years is 15.96% compared to the category average of 12.97%. Looking at the past 5 years, the fund's standard deviation is 15.65% compared to the category average of 13.07%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. VEXPX lost 52.39% in the most recent bear market and outperformed its peer group by 1%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VEXPX has a 5-year beta of 1.17, which means it 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. The fund has produced a negative alpha over the past 5 years of -1.22, 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.
As of the last filing date, the mutual fund has 97.38% of its assets in stocks, with an average market capitalization of $7.04 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Retail Trade
With turnover at about 78%, this fund makes fewer trades than comparable funds.
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, VEXPX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 1.22%. Looking at the fund from a cost perspective, VEXPX is actually cheaper than its peers.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Explorer Fund Investor ( VEXPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Explorer Fund Investor ( VEXPX ) looks like a good potential choice for investors right now.
For additional information on the Small Cap Growth 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 VEXPX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Vanguard Explorer Fund Investor (VEXPX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Small Cap Growth fund? Vanguard Explorer Fund Investor (VEXPX - Free Report) is a potential starting point. VEXPX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as VEXPX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXPX. Vanguard Explorer Fund Investor made its debut in December of 1967, and since then, VEXPX has accumulated about $3.68 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 11.42%, and it sits in the middle 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 16%, 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 VEXPX over the past three years is 15.96% compared to the category average of 12.97%. Looking at the past 5 years, the fund's standard deviation is 15.65% compared to the category average of 13.07%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. VEXPX lost 52.39% in the most recent bear market and outperformed its peer group by 1%. These results could imply that the fund is a better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VEXPX has a 5-year beta of 1.17, which means it 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. The fund has produced a negative alpha over the past 5 years of -1.22, 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.
As of the last filing date, the mutual fund has 97.38% of its assets in stocks, with an average market capitalization of $7.04 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
- Retail Trade
With turnover at about 78%, this fund makes fewer trades than comparable funds.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, VEXPX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 1.22%. Looking at the fund from a cost perspective, VEXPX is actually cheaper than its peers.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard Explorer Fund Investor ( VEXPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Explorer Fund Investor ( VEXPX ) looks like a good potential choice for investors right now.
For additional information on the Small Cap Growth 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 VEXPX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.