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Is Vanguard Extended Market Index Admiral (VEXAX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Small Cap Blend fund category, Vanguard Extended Market Index Admiral (VEXAX - Free Report) could be a potential option. VEXAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VEXAX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXAX. The Vanguard Extended Market Index Admiral made its debut in November of 2000 and VEXAX has managed to accumulate roughly $25.19 billion in assets, as of the most recently available information. Donald Butler is the fund's current manager and has held that role since November of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VEXAX has a 5-year annualized total return of 13.52% 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 12.87%, 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 VEXAX over the past three years is 25.22% compared to the category average of 14.41%. Looking at the past 5 years, the fund's standard deviation is 20.89% compared to the category average of 12.41%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.29, which means it is hypothetically more volatile than the market at large. 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. VEXAX's 5-year performance has produced a negative alpha of -3.18, which means 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 principally on equities that are traded in the United States.
Right now, 93.15% of this mutual fund's holdings are stocks, which have an average market capitalization of $36.91 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
Other
With turnover at about 10%, 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, VEXAX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.98%. From a cost perspective, VEXAX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Extended Market Index Admiral ( VEXAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Small 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 VEXAX 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 Extended Market Index Admiral (VEXAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Small Cap Blend fund category, Vanguard Extended Market Index Admiral (VEXAX - Free Report) could be a potential option. VEXAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VEXAX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXAX. The Vanguard Extended Market Index Admiral made its debut in November of 2000 and VEXAX has managed to accumulate roughly $25.19 billion in assets, as of the most recently available information. Donald Butler is the fund's current manager and has held that role since November of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VEXAX has a 5-year annualized total return of 13.52% 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 12.87%, 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 VEXAX over the past three years is 25.22% compared to the category average of 14.41%. Looking at the past 5 years, the fund's standard deviation is 20.89% compared to the category average of 12.41%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.29, which means it is hypothetically more volatile than the market at large. 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. VEXAX's 5-year performance has produced a negative alpha of -3.18, which means 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 principally on equities that are traded in the United States.
Right now, 93.15% of this mutual fund's holdings are stocks, which have an average market capitalization of $36.91 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
- Other
With turnover at about 10%, 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, VEXAX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.98%. From a cost perspective, VEXAX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Extended Market Index Admiral ( VEXAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Small 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 VEXAX 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.