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Is Vanguard STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Mutual Fund Equity Report funds, a place to start could be Vanguard STAR Fund (VGSTX - Free Report) . VGSTX bears 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
VGSTX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard STAR Fund made its debut in March of 1985, and since then, VGSTX has accumulated about $23.31 billion in assets, per the most up-to-date date available. Michael Perre is the fund's current manager and has held that role since August of 2008.
Performance
Investors naturally seek funds with strong performance. VGSTX has a 5-year annualized total return of 7.14% and is 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 7.15%, which places it in the middle 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 12.84%, the standard deviation of VGSTX over the past three years is 13.87%. The standard deviation of the fund over the past 5 years is 12.22% compared to the category average of 11.4%. 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 0.68, which means it is hypothetically less volatile than the market at large. 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. VGSTX's 5-year performance has produced a negative alpha of -1.9, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. 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%. From a cost perspective, VGSTX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $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, Vanguard STAR Fund ( VGSTX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VGSTX to its peers as well 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 STAR Fund (VGSTX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Mutual Fund Equity Report funds, a place to start could be Vanguard STAR Fund (VGSTX - Free Report) . VGSTX bears 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
VGSTX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard STAR Fund made its debut in March of 1985, and since then, VGSTX has accumulated about $23.31 billion in assets, per the most up-to-date date available. Michael Perre is the fund's current manager and has held that role since August of 2008.
Performance
Investors naturally seek funds with strong performance. VGSTX has a 5-year annualized total return of 7.14% and is 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 7.15%, which places it in the middle 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 12.84%, the standard deviation of VGSTX over the past three years is 13.87%. The standard deviation of the fund over the past 5 years is 12.22% compared to the category average of 11.4%. 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 0.68, which means it is hypothetically less volatile than the market at large. 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. VGSTX's 5-year performance has produced a negative alpha of -1.9, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. 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%. From a cost perspective, VGSTX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $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, Vanguard STAR Fund ( VGSTX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VGSTX to its peers as well 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.