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Is Vanguard Equity Income Fund Admiral (VEIRX) a Strong Mutual Fund Pick Right Now?

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If investors are looking at the Large Cap Value fund category, Vanguard Equity Income Fund Admiral (VEIRX - Free Report) could be a potential option. VEIRX holds 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

VEIRX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Equity Income Fund Admiral made its debut in August of 2001, VEIRX has garnered more than $25.26 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 14.59%, 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 11.12%, 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. Over the past three years, VEIRX's standard deviation comes in at 9.29%, compared to the category average of 9.59%. The fund's standard deviation over the past 5 years is 9.01% compared to the category average of 9.89%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, VEIRX lost 48.76% and outperformed its peer group by 1.4%. This might suggest that the fund is a better choice than its peers during a bear market.

Nevertheless, with a 5-year beta of 0.92, the fund is likely to be less volatile than the market average. 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. Over the past 5 years, the fund has a positive alpha of 0.15. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VEIRX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 1.04%. VEIRX 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 $50,000 and that each subsequent investment needs to be at $1.

Bottom Line

Overall, Vanguard Equity Income Fund Admiral has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Equity Income Fund Admiral looks like a good potential choice for investors right now.

Want even more information about VEIRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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