There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Emerging Markets Select Stock Investor (VMMSX - Free Report) . VMMSX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
VMMSX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.
History of Fund/Manager
VMMSX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Emerging Markets Select Stock Investor debuted in June of 2011. Since then, VMMSX has accumulated assets of about $741.63 million, according to the most recently available information. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 4.19%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 6.01%, 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. Compared to the category average of 13.03%, the standard deviation of VMMSX over the past three years is 15.88%. The fund's standard deviation over the past 5 years is 15.62% compared to the category average of 12.66%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.
Investors should note that the fund has a 5-year beta of 1.04, so it is likely going to be more volatile than the market at large. 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. With a negative alpha of -7.56, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VMMSX is a no load fund. It has an expense ratio of 0.92% compared to the category average of 1.28%. VMMSX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Overall, Vanguard Emerging Markets Select Stock Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
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