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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) . VEXMX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VEXMX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXMX. Vanguard Extended Market Index Investor debuted in December of 1987. Since then, VEXMX has accumulated assets of about $209.86 million, according to the most recently available information. The fund is currently managed by Donald Butler who has been in charge of the fund since November of 2000.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.97%, and it sits in the bottom 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 0.83%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. VEXMX's standard deviation over the past three years is 21.37% compared to the category average of 15.23%. Looking at the past 5 years, the fund's standard deviation is 23.96% compared to the category average of 16.45%. 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 1.19, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VEXMX's 5-year performance has produced a negative alpha of -5.85, which means 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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 86.88% in stocks, with an average market capitalization of $12.25 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Industrial Cyclical
Turnover is about 11%, so those in charge of the fund make fewer trades than comparable funds.
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, VEXMX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 0.95%. So, VEXMX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Small Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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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) . VEXMX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VEXMX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEXMX. Vanguard Extended Market Index Investor debuted in December of 1987. Since then, VEXMX has accumulated assets of about $209.86 million, according to the most recently available information. The fund is currently managed by Donald Butler who has been in charge of the fund since November of 2000.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 9.97%, and it sits in the bottom 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 0.83%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. VEXMX's standard deviation over the past three years is 21.37% compared to the category average of 15.23%. Looking at the past 5 years, the fund's standard deviation is 23.96% compared to the category average of 16.45%. 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 1.19, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VEXMX's 5-year performance has produced a negative alpha of -5.85, which means 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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 86.88% in stocks, with an average market capitalization of $12.25 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Industrial Cyclical
Turnover is about 11%, so those in charge of the fund make fewer trades than comparable funds.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, VEXMX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 0.95%. So, VEXMX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Small Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.