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Is Vanguard Financials Index Admiral (VFAIX) a Strong Mutual Fund Pick Right Now?
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Looking for a Sector - Finance fund? You may want to consider Vanguard Financials Index Admiral (VFAIX - Free Report) as a possible option. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VFAIX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
VFAIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Financials Index Admiral made its debut in January of 2004, and since then, VFAIX has accumulated about $538.51 million in assets, per the most up-to-date date available. William Coleman is the fund's current manager and has held that role since December of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.46%, and it sits in the middle 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 1.33%, 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. VFAIX's standard deviation over the past three years is 24.1% compared to the category average of 16.93%. The standard deviation of the fund over the past 5 years is 20.71% compared to the category average of 14.35%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.2, so investors should note that it is hypothetically more 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. VFAIX has generated a negative alpha over the past five years of -5.12, 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.
Right now, 87.24% of this mutual fund's holdings are stocks, which have an average market capitalization of $94.26 billion. Turnover is about 5%, so those in charge of the fund make 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, VFAIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.55%. From a cost perspective, VFAIX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $1.
Bottom Line
Want even more information about VFAIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Vanguard Financials Index Admiral (VFAIX) a Strong Mutual Fund Pick Right Now?
Looking for a Sector - Finance fund? You may want to consider Vanguard Financials Index Admiral (VFAIX - Free Report) as a possible option. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VFAIX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
VFAIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Financials Index Admiral made its debut in January of 2004, and since then, VFAIX has accumulated about $538.51 million in assets, per the most up-to-date date available. William Coleman is the fund's current manager and has held that role since December of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.46%, and it sits in the middle 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 1.33%, 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. VFAIX's standard deviation over the past three years is 24.1% compared to the category average of 16.93%. The standard deviation of the fund over the past 5 years is 20.71% compared to the category average of 14.35%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.2, so investors should note that it is hypothetically more 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. VFAIX has generated a negative alpha over the past five years of -5.12, 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.
Right now, 87.24% of this mutual fund's holdings are stocks, which have an average market capitalization of $94.26 billion. Turnover is about 5%, so those in charge of the fund make 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, VFAIX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 1.55%. From a cost perspective, VFAIX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $1.
Bottom Line
Want even more information about VFAIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.