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Is Vanguard 500 Index Admiral (VFIAX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Index funds, consider Vanguard 500 Index Admiral (VFIAX - Free Report) as a possibility. VFIAX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VFIAX, and the company is based out of Malvern, PA. Vanguard 500 Index Admiral debuted in November of 2000. Since then, VFIAX has accumulated assets of about $354.52 billion, according to the most recently available information. Donald Butler is the fund's current manager and has held that role since April of 2016.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.12%, 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 11.67%, 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. Compared to the category average of 15.67%, the standard deviation of VFIAX over the past three years is 18.7%. The fund's standard deviation over the past 5 years is 15.07% compared to the category average of 13.24%. 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, so it is likely going to be as volatile as 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. VFIAX has generated a negative alpha over the past five years of -0.02, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 mostly on equities that are traded in the United States.
This fund is currently holding about 97.65% stock in stocks, and these companies have an average market capitalization of $279.01 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Turnover is about 4%, so those in charge of the fund make 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, VFIAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.80%. From a cost perspective, VFIAX 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 VFIAXin 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is Vanguard 500 Index Admiral (VFIAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Index funds, consider Vanguard 500 Index Admiral (VFIAX - Free Report) as a possibility. VFIAX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VFIAX, and the company is based out of Malvern, PA. Vanguard 500 Index Admiral debuted in November of 2000. Since then, VFIAX has accumulated assets of about $354.52 billion, according to the most recently available information. Donald Butler is the fund's current manager and has held that role since April of 2016.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.12%, 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 11.67%, 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. Compared to the category average of 15.67%, the standard deviation of VFIAX over the past three years is 18.7%. The fund's standard deviation over the past 5 years is 15.07% compared to the category average of 13.24%. 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, so it is likely going to be as volatile as 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. VFIAX has generated a negative alpha over the past five years of -0.02, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 mostly on equities that are traded in the United States.
This fund is currently holding about 97.65% stock in stocks, and these companies have an average market capitalization of $279.01 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
Turnover is about 4%, so those in charge of the fund make 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, VFIAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.80%. From a cost perspective, VFIAX 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 VFIAXin 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.