Have you been searching for a Sector - Precious Metal fund? You might want to begin with Vanguard Precious Metals & Mining (VGPMX Quick QuoteVGPMX - Free Report) . VGPMX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that VGPMX is a Sector - Precious Metal option, and this area is loaded with different options. Sector - Precious Metal funds typically invest in companies that are involved in the mining and production of precious metals like gold, silver, platinum, and palladium. Because stocks in this environment often trade as leveraged bets of the underlying commodity--they are tied to the prices of the metal--these equities tend to be volatile.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VGPMX. Since Vanguard Precious Metals & Mining made its debut in May of 1984, VGPMX has garnered more than $2.21 billion in assets. The fund is currently managed by Jamie J. Horvat who has been in charge of the fund since February of 2014.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of -1.34%, and is 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 10.31%, 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, VGPMX's standard deviation comes in at 31.85%, compared to the category average of 37.68%. The fund's standard deviation over the past 5 years is 29.17% compared to the category average of 36.24%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. VGPMX lost 64.02% in the most recent bear market and outperformed its peer group by 28.19%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Investors should note that the fund has a 5-year beta of 0.36, so it is likely going to be less 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. With a negative alpha of -2.26, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VGPMX is a no load fund. It has an expense ratio of 0.36% compared to the category average of 1.36%. VGPMX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Precious Metals & Mining has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Vanguard Precious Metals & Mining looks like a somewhat average choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Sector - Precious Metal, make sure to go to www.zacks.com/funds/mutual-funds 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.