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Is Vanguard Financials Index Admiral (VFAIX) a Strong Mutual Fund Pick Right Now?
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Have you been searching for a Sector - Finance fund? You might want to begin with Vanguard Financials Index Admiral (VFAIX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VFAIX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
Vanguard Group is responsible for VFAIX, and the company is based out of Malvern, PA. Vanguard Financials Index Admiral debuted in January of 2004. Since then, VFAIX has accumulated assets of about $557.80 million, according to the most recently available information. The fund's current manager, William A. Coleman, has been in charge of the fund since December of 2015.
Performance
Investors naturally seek funds with strong performance. VFAIX has a 5-year annualized total return of 11.44% 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 15.16%, 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 VFAIX over the past three years is 16.9% compared to the category average of 17.14%. Looking at the past 5 years, the fund's standard deviation is 15.64% compared to the category average of 16.46%. This makes the fund less 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. In VFAIX's case, the fund lost 71.45% in the most recent bear market and underperformed its peer group by 10%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -0.42. This means 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 83.81% stock in stocks, and these companies have an average market capitalization of $104.97 billion. With turnover at about 12%, this fund makes 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, VFAIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.41%. From a cost perspective, VFAIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $100,000 and that each subsequent investment needs to be at $1.
Bottom Line
Don't stop here for your research on Sector - Finance funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VFAIX to its peers as well 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.
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Is Vanguard Financials Index Admiral (VFAIX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Sector - Finance fund? You might want to begin with Vanguard Financials Index Admiral (VFAIX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VFAIX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
Vanguard Group is responsible for VFAIX, and the company is based out of Malvern, PA. Vanguard Financials Index Admiral debuted in January of 2004. Since then, VFAIX has accumulated assets of about $557.80 million, according to the most recently available information. The fund's current manager, William A. Coleman, has been in charge of the fund since December of 2015.
Performance
Investors naturally seek funds with strong performance. VFAIX has a 5-year annualized total return of 11.44% 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 15.16%, 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 VFAIX over the past three years is 16.9% compared to the category average of 17.14%. Looking at the past 5 years, the fund's standard deviation is 15.64% compared to the category average of 16.46%. This makes the fund less 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. In VFAIX's case, the fund lost 71.45% in the most recent bear market and underperformed its peer group by 10%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.1, the fund is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -0.42. This means 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 83.81% stock in stocks, and these companies have an average market capitalization of $104.97 billion. With turnover at about 12%, this fund makes 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, VFAIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.41%. From a cost perspective, VFAIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $100,000 and that each subsequent investment needs to be at $1.
Bottom Line
Don't stop here for your research on Sector - Finance funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VFAIX to its peers as well 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.