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Is Vanguard Extended Market Index Investor (VEXMX) a Strong Mutual Fund Pick Right Now?
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Investors in search of a Small Cap Blend fund might want to consider looking at Vanguard Extended Market Index Investor (VEXMX - Free Report) . 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
We classify VEXMX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Vanguard Group is responsible for VEXMX, and the company is based out of Malvern, PA. Since Vanguard Extended Market Index Investor made its debut in December of 1987, VEXMX has garnered more than $489.12 million in assets. The fund's current manager, Donald Butler, has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 17.85%, 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 18.05%, 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 16.44%, the standard deviation of VEXMX over the past three years is 25.37%. Looking at the past 5 years, the fund's standard deviation is 20.28% compared to the category average of 13.75%. 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. VEXMX has a 5-year beta of 1.26, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -1.64. This means 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 77.37% stock in stocks, and these companies have an average market capitalization of $15.34 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Other
Turnover is about 19%, so those in charge of the fund make fewer trades than the average comparable fund.
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, VEXMX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 1%. So, VEXMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
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 VEXMX too 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.
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Is Vanguard Extended Market Index Investor (VEXMX) a Strong Mutual Fund Pick Right Now?
Investors in search of a Small Cap Blend fund might want to consider looking at Vanguard Extended Market Index Investor (VEXMX - Free Report) . 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
We classify VEXMX in the Small Cap Blend category, an area rife with potential choices. Small Cap Blend mutual funds usually target companies with a market capitalization of less than $2 billion. A small-cap blend mutual fund allows investors to diversify their funds among various types of small-cap stocks, which can help reduce the volatility inherent in lower market cap companies.
History of Fund/Manager
Vanguard Group is responsible for VEXMX, and the company is based out of Malvern, PA. Since Vanguard Extended Market Index Investor made its debut in December of 1987, VEXMX has garnered more than $489.12 million in assets. The fund's current manager, Donald Butler, has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 17.85%, 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 18.05%, 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 16.44%, the standard deviation of VEXMX over the past three years is 25.37%. Looking at the past 5 years, the fund's standard deviation is 20.28% compared to the category average of 13.75%. 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. VEXMX has a 5-year beta of 1.26, which means it is likely to be more volatile than the market average. 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. Over the past 5 years, the fund has a negative alpha of -1.64. This means 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 largely on equities that are traded in the United States.
Currently, this mutual fund is holding 77.37% stock in stocks, and these companies have an average market capitalization of $15.34 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Other
Turnover is about 19%, so those in charge of the fund make fewer trades than the average comparable fund.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, VEXMX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 1%. So, VEXMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
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 VEXMX too 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.