We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Vanguard Tax-Managed Small Cap Investor (VTMSX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Small Cap Blend fund seekers should consider taking a look at Vanguard Tax-Managed Small Cap Investor (VTMSX - Free Report) . VTMSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VTMSX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is responsible for VTMSX, and the company is based out of Malvern, PA. Since Vanguard Tax-Managed Small Cap Investor made its debut in April of 1999, VTMSX has garnered more than $6.20 billion in assets. The fund is currently managed by William Coleman who has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.38%, and is in the top 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 4.78%, 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. VTMSX's standard deviation over the past three years is 25.18% compared to the category average of 18.84%. The standard deviation of the fund over the past 5 years is 21.41% compared to the category average of 16.13%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.26, so investors should note that it is hypothetically more volatile than the market at large. 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 -6.23. 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.
The mutual fund currently has 98.07% of its holdings in stocks, which have an average market capitalization of $2.22 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
With turnover at about 52%, 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, VTMSX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 1.08%. From a cost perspective, VTMSX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $10,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) 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.
Your research on the Small Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Tax-Managed Small Cap Investor (VTMSX) a Strong Mutual Fund Pick Right Now?
Small Cap Blend fund seekers should consider taking a look at Vanguard Tax-Managed Small Cap Investor (VTMSX - Free Report) . VTMSX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VTMSX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is responsible for VTMSX, and the company is based out of Malvern, PA. Since Vanguard Tax-Managed Small Cap Investor made its debut in April of 1999, VTMSX has garnered more than $6.20 billion in assets. The fund is currently managed by William Coleman who has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 9.38%, and is in the top 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 4.78%, 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. VTMSX's standard deviation over the past three years is 25.18% compared to the category average of 18.84%. The standard deviation of the fund over the past 5 years is 21.41% compared to the category average of 16.13%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.26, so investors should note that it is hypothetically more volatile than the market at large. 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 -6.23. 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.
The mutual fund currently has 98.07% of its holdings in stocks, which have an average market capitalization of $2.22 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Technology
With turnover at about 52%, 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, VTMSX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 1.08%. From a cost perspective, VTMSX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $10,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) 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.
Your research on the Small Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.