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Is Vanguard Value Index Admiral (VVIAX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Large Cap Value fund category, Vanguard Value Index Admiral (VVIAX - Free Report) could be a potential option. VVIAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VVIAX. Since Vanguard Value Index Admiral made its debut in November of 2000, VVIAX has garnered more than $17.43 billion in assets. The fund's current manager, Gerard C. O'Reilly, has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 10.28%, 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 11.13%, 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. VVIAX's standard deviation over the past three years is 9.11% compared to the category average of 8.96%. The fund's standard deviation over the past 5 years is 9.7% compared to the category average of 9.19%. This makes the fund more 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. In the most recent bear market, VVIAX lost 53.91% and underperformed its peer group by 3.21%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VVIAX has a 5-year beta of 0.93, which means it 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. The fund has produced a negative alpha over the past 5 years of -0.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 85.03% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $163.15 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
With turnover at about 18%, this fund is making 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, VVIAX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 1.03%. VVIAX 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 $10,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Value Index Admiral ( VVIAX ) 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.
Don't stop here for your research on Large Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VVIAX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Vanguard Value Index Admiral (VVIAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Large Cap Value fund category, Vanguard Value Index Admiral (VVIAX - Free Report) could be a potential option. VVIAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VVIAX. Since Vanguard Value Index Admiral made its debut in November of 2000, VVIAX has garnered more than $17.43 billion in assets. The fund's current manager, Gerard C. O'Reilly, has been in charge of the fund since November of 2000.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 10.28%, 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 11.13%, 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. VVIAX's standard deviation over the past three years is 9.11% compared to the category average of 8.96%. The fund's standard deviation over the past 5 years is 9.7% compared to the category average of 9.19%. This makes the fund more 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. In the most recent bear market, VVIAX lost 53.91% and underperformed its peer group by 3.21%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VVIAX has a 5-year beta of 0.93, which means it 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. The fund has produced a negative alpha over the past 5 years of -0.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 85.03% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $163.15 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
With turnover at about 18%, this fund is making 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, VVIAX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 1.03%. VVIAX 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 $10,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Value Index Admiral ( VVIAX ) 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.
Don't stop here for your research on Large Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VVIAX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.