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Is Vanguard Diversified Equity Investor (VDEQX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Blend funds, consider Vanguard Diversified Equity Investor (VDEQX - Free Report) as a possibility. 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
VDEQX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Diversified Equity Investor made its debut in June of 2005, VDEQX has garnered more than $1.65 billion in assets. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 12.43%, 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 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. Compared to the category average of 10.58%, the standard deviation of VDEQX over the past three years is 10.76%. Over the past 5 years, the standard deviation of the fund 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. VDEQX lost 52.19% in the most recent bear market and outperformed its peer group by 2.52%. This makes the fund a possibly better choice than its peers during a sliding market environment.
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. 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 -0.86, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
Right now, 99.32% of this mutual fund's holdings are stocks and it has a negligible amount of assets in foreign securities. Turnover is 18%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, VDEQX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 1%. VDEQX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $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, this fund looks like a good potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VDEQX too 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?
If you've been stuck searching for Large Cap Blend funds, consider Vanguard Diversified Equity Investor (VDEQX - Free Report) as a possibility. 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
VDEQX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Diversified Equity Investor made its debut in June of 2005, VDEQX has garnered more than $1.65 billion in assets. The fund is currently managed by William A. Coleman who has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 12.43%, 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 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. Compared to the category average of 10.58%, the standard deviation of VDEQX over the past three years is 10.76%. Over the past 5 years, the standard deviation of the fund 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. VDEQX lost 52.19% in the most recent bear market and outperformed its peer group by 2.52%. This makes the fund a possibly better choice than its peers during a sliding market environment.
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. 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 -0.86, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 primarily on equities that are traded in the United States.
Right now, 99.32% of this mutual fund's holdings are stocks and it has a negligible amount of assets in foreign securities. Turnover is 18%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, VDEQX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 1%. VDEQX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $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, this fund looks like a good potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VDEQX too 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.