On the lookout for a Mid Cap Blend fund? Starting with Vanguard Strategic Equity Fund (VSEQX Quick QuoteVSEQX - Free Report) is one possibility. VSEQX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Mid Cap Blend mutual funds is an area filled with options, such as VSEQX. Mid Cap Blend funds expose investors to value picks, income opportunities, and exciting growth potential, but also give some stability; these funds usually seek a stock portfolio of various size and style, which allows for diversification when the focus is on companies with market capitalization in the range of $2 billion to $10 billion.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VSEQX. The Vanguard Strategic Equity Fund made its debut in August of 1995 and VSEQX has managed to accumulate roughly $10.14 billion in assets, as of the most recently available information. Cesar Orosco is the fund's current manager and has held that role since February of 2021.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 13.24%, 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 15%, 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 15.52%, the standard deviation of VSEQX over the past three years is 17.1%. Looking at the past 5 years, the fund's standard deviation is 18.48% compared to the category average of 17.32%. 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 1.08, which means it is hypothetically more 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. VSEQX has generated a negative alpha over the past five years of -2, 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 largely on equities that are traded in the United States.

The mutual fund currently has 87.51% of its holdings in stocks, which have an average market capitalization of $14.16 billion. The fund has the heaviest exposure to the following market sectors:

• Finance
• Technology
• Industrial Cyclical

With turnover at about 62%, this fund is making more trades in a given year than the category average.

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, VSEQX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.90%. From a cost perspective, VSEQX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.

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

Bottom Line

Overall, Vanguard Strategic Equity Fund ( VSEQX ) 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 Mid Cap Blend 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.