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Is Vanguard Diversified Equity Investor (VDEQX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Diversified Equity Investor (VDEQX - Free Report) . VDEQX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDEQX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDEQX. Vanguard Diversified Equity Investor debuted in June of 2005. Since then, VDEQX has accumulated assets of about $1.65 billion, according to the most recently available information. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 12.43%, and it sits in the top 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 11.18%, 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. The standard deviation of VDEQX over the past three years is 10.76% compared to the category average of 10.58%. Looking at the past 5 years, the fund's standard deviation is 10.2% compared to the category average of 10.32%. 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 VDEQX's case, the fund lost 52.19% in the most recent bear market and outperformed its peer group by 2.52%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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. With a negative alpha of -0.86, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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.
As of the last filing date, the mutual fund has 99.32% of its assets in stocks and it has a negligible amount of assets in foreign securities. Turnover is 18%, which means this fund makes fewer trades than comparable funds.
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, VDEQX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 1%. From a cost perspective, VDEQX 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.
Bottom Line
Overall, Vanguard Diversified Equity Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Diversified Equity Investor looks like a good potential choice for investors right now.
Your research on the Large 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Vanguard Diversified Equity Investor (VDEQX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Diversified Equity Investor (VDEQX - Free Report) . VDEQX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VDEQX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VDEQX. Vanguard Diversified Equity Investor debuted in June of 2005. Since then, VDEQX has accumulated assets of about $1.65 billion, according to the most recently available information. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 12.43%, and it sits in the top 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 11.18%, 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. The standard deviation of VDEQX over the past three years is 10.76% compared to the category average of 10.58%. Looking at the past 5 years, the fund's standard deviation is 10.2% compared to the category average of 10.32%. 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 VDEQX's case, the fund lost 52.19% in the most recent bear market and outperformed its peer group by 2.52%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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. With a negative alpha of -0.86, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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.
As of the last filing date, the mutual fund has 99.32% of its assets in stocks and it has a negligible amount of assets in foreign securities. Turnover is 18%, which means this fund makes fewer trades than comparable funds.
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, VDEQX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 1%. From a cost perspective, VDEQX 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.
Bottom Line
Overall, Vanguard Diversified Equity Investor has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Diversified Equity Investor looks like a good potential choice for investors right now.
Your research on the Large 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.