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Is Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Mutual Fund Equity Report fund category, Vanguard STAR Fund (VGSTX - Free Report) could be a potential option. VGSTX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Vanguard Group is responsible for VGSTX, and the company is based out of Malvern, PA. Vanguard STAR Fund debuted in March of 1985. Since then, VGSTX has accumulated assets of about $26.89 billion, according to the most recently available information. The fund is currently managed by William Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.29%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.69%, 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. VGSTX's standard deviation over the past three years is 12.38% compared to the category average of 12.06%. The fund's standard deviation over the past 5 years is 10.9% compared to the category average of 10.54%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.67, so investors should note that it is hypothetically less 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. With a negative alpha of -0.22, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSTX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.86%. So, VGSTX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard STAR Fund ( VGSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mutual Fund Equity Report fund category, Vanguard STAR Fund (VGSTX - Free Report) could be a potential option. VGSTX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Vanguard Group is responsible for VGSTX, and the company is based out of Malvern, PA. Vanguard STAR Fund debuted in March of 1985. Since then, VGSTX has accumulated assets of about $26.89 billion, according to the most recently available information. The fund is currently managed by William Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.29%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.69%, 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. VGSTX's standard deviation over the past three years is 12.38% compared to the category average of 12.06%. The fund's standard deviation over the past 5 years is 10.9% compared to the category average of 10.54%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.67, so investors should note that it is hypothetically less 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. With a negative alpha of -0.22, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VGSTX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.86%. So, VGSTX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $1.
Bottom Line
Overall, Vanguard STAR Fund ( VGSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.