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Is Vanguard REIT Index Investor (VGSIX) a Strong Mutual Fund Pick Right Now?
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If you're looking for an Index fund category, then a possible option is Vanguard REIT Index Investor (VGSIX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VGSIX, and the company is based out of Malvern, PA. The Vanguard REIT Index Investor made its debut in May of 1996 and VGSIX has managed to accumulate roughly $175.41 million in assets, as of the most recently available information. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2001.
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 0.31%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.62%, which places it in the bottom 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 13.07%, the standard deviation of VGSIX over the past three years is 17%. Over the past 5 years, the standard deviation of the fund is 16.28% compared to the category average of 11.98%. 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 VGSIX's case, the fund lost 64.54% in the most recent bear market and underperformed its peer group by 22%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.82, so it is likely going to be 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. Over the past 5 years, the fund has a negative alpha of -4.57. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSIX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 0.84%. Looking at the fund from a cost perspective, VGSIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
This could just be the start of your research on VGSIXin the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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 REIT Index Investor (VGSIX) a Strong Mutual Fund Pick Right Now?
If you're looking for an Index fund category, then a possible option is Vanguard REIT Index Investor (VGSIX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VGSIX, and the company is based out of Malvern, PA. The Vanguard REIT Index Investor made its debut in May of 1996 and VGSIX has managed to accumulate roughly $175.41 million in assets, as of the most recently available information. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2001.
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 0.31%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -1.62%, which places it in the bottom 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 13.07%, the standard deviation of VGSIX over the past three years is 17%. Over the past 5 years, the standard deviation of the fund is 16.28% compared to the category average of 11.98%. 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 VGSIX's case, the fund lost 64.54% in the most recent bear market and underperformed its peer group by 22%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.82, so it is likely going to be 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. Over the past 5 years, the fund has a negative alpha of -4.57. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSIX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 0.84%. Looking at the fund from a cost perspective, VGSIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
This could just be the start of your research on VGSIXin the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.