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 Total Stock Market Index Investor (VTSMX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Are you on the hunt for an Index fund? You should think about starting with Vanguard Total Stock Market Index Investor (VTSMX - 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.
History of Fund/Manager
Vanguard Group is responsible for VTSMX, and the company is based out of Malvern, PA. Since Vanguard Total Stock Market Index Investor made its debut in April of 1992, VTSMX has garnered more than $142.14 billion in assets. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2000.
Performance
Investors naturally seek funds with strong performance. VTSMX has a 5-year annualized total return of 17.26% 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 18%, 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. Over the past three years, VTSMX's standard deviation comes in at 19.44%, compared to the category average of 15.33%. The fund's standard deviation over the past 5 years is 15.64% compared to the category average of 12.73%. 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. VTSMX has a 5-year beta of 1.03, which means it is likely to be as volatile as 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. VTSMX has generated a negative alpha over the past five years of -0.59, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 primarily on equities that are traded in the United States.
This fund is currently holding about 95.05% stock in stocks, which have an average market capitalization of $263.91 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
Turnover is 8%, which means this fund makes 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, VTSMX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.79%. Looking at the fund from a cost perspective, VTSMX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Your research on the Index 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. 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Total Stock Market Index Investor (VTSMX) a Strong Mutual Fund Pick Right Now?
Are you on the hunt for an Index fund? You should think about starting with Vanguard Total Stock Market Index Investor (VTSMX - 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.
History of Fund/Manager
Vanguard Group is responsible for VTSMX, and the company is based out of Malvern, PA. Since Vanguard Total Stock Market Index Investor made its debut in April of 1992, VTSMX has garnered more than $142.14 billion in assets. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2000.
Performance
Investors naturally seek funds with strong performance. VTSMX has a 5-year annualized total return of 17.26% 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 18%, 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. Over the past three years, VTSMX's standard deviation comes in at 19.44%, compared to the category average of 15.33%. The fund's standard deviation over the past 5 years is 15.64% compared to the category average of 12.73%. 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. VTSMX has a 5-year beta of 1.03, which means it is likely to be as volatile as 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. VTSMX has generated a negative alpha over the past five years of -0.59, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 primarily on equities that are traded in the United States.
This fund is currently holding about 95.05% stock in stocks, which have an average market capitalization of $263.91 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
Turnover is 8%, which means this fund makes 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, VTSMX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.79%. Looking at the fund from a cost perspective, VTSMX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Your research on the Index 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. 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.