If you've been stuck searching for Index funds, consider Vanguard FTSE Social Index Investor (VFTSX - Free Report) as a possibility. VFTSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFTSX. Vanguard FTSE Social Index Investor made its debut in May of 2000, and since then, VFTSX has accumulated about $2.63 billion in assets, per the most up-to-date date available. The fund is currently managed by William A. Coleman who has been in charge of the fund since December of 2015.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 9.12%, and is 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 9.72%, 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 VFTSX over the past three years is 11.28% compared to the category average of 8.51%. The fund's standard deviation over the past 5 years is 11.26% compared to the category average of 8.93%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In VFTSX's case, the fund lost 56.56% in the most recent bear market and underperformed its peer group by 11.02%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.01, which means it is hypothetically as volatile as the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VFTSX has generated a positive alpha over the past five years of 0.51, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
Right now, 87.22% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $244.99 billion. The fund has the heaviest exposure to the following market sectors:
This fund's turnover is about 8%, so the fund managers are making fewer trades than the average comparable fund.
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, VFTSX is a no load fund. It has an expense ratio of 0.18% compared to the category average of 0.74%. So, VFTSX is actually cheaper than its peers from a cost perspective.
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.
This could just be the start of your research on VFTSXin the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.