Back to top

Image: Bigstock

Is Vanguard Mid-Cap Growth Index Admiral (VMGMX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

If you've been stuck searching for Index funds, consider Vanguard Mid-Cap Growth Index Admiral (VMGMX - Free Report) as a possibility. VMGMX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VMGMX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Mid-Cap Growth Index Admiral made its debut in September of 2011, and since then, VMGMX has accumulated about $10.21 billion in assets, per the most up-to-date date available. Donald Butler is the fund's current manager and has held that role since February of 2013.

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 15.52%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 17.52%, 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 VMGMX over the past three years is 21.29% compared to the category average of 14.91%. The standard deviation of the fund over the past 5 years is 17.71% compared to the category average of 12.87%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VMGMX has a 5-year beta of 1.1, 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. Over the past 5 years, the fund has a positive alpha of 0.4. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, VMGMX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 0.81%. From a cost perspective, VMGMX 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 Mid-Cap Growth Index Admiral ( VMGMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Index 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 VMGMX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Vanguard Mid-Cap Growth Index Adm (VMGMX) - free report >>

Published in