If investors are looking at the Large Cap Growth fund category, Vanguard Tax-Managed Cap Appreciation Institutional (VTCIX Quick QuoteVTCIX - Free Report) could be a potential option. VTCIX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

VTCIX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

VTCIX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Tax-Managed Cap Appreciation Institutional made its debut in February of 1999, VTCIX has garnered more than $3.41 billion in assets. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 15.41%, 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 11.79%, which places it in the top 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. Compared to the category average of 15.09%, the standard deviation of VTCIX over the past three years is 16.62%. The fund's standard deviation over the past 5 years is 16.53% compared to the category average of 14.83%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.02, the fund 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. VTCIX has generated a negative alpha over the past five years of -0.37, demonstrating that 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, VTCIX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.83%. VTCIX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $5 million and that each subsequent investment needs to be at $1

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Vanguard Tax-Managed Cap Appreciation Institutional ( VTCIX ) 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.

This could just be the start of your research on VTCIXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.