Large Cap Growth fund seekers should not consider taking a look at Vanguard Capital Opportunity Investor (VHCOX - Free Report) at this time. VHCOX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
VHCOX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VHCOX. The Vanguard Capital Opportunity Investor made its debut in August of 1995 and VHCOX has managed to accumulate roughly $1.79 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.36%, and is in the middle 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 16.91%, 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. VHCOX's standard deviation over the past three years is 14.57% compared to the category average of 10.79%. The fund's standard deviation over the past 5 years is 14.01% compared to the category average of 11.05%. 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 VHCOX's case, the fund lost 49.21% in the most recent bear market and underperformed its peer group by 0.35%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Even still, the fund has a 5-year beta of 1.14, so investors should note that it is hypothetically more volatile than 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. The fund has produced a positive alpha over the past 5 years of 0.3, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 93.82% stock in stocks, with an average market capitalization of $111.28 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Turnover is 10%, which means, on average, the fund makes fewer trades than its comparable peers.
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, VHCOX is a no load fund. It has an expense ratio of 0.43% compared to the category average of 1.06%. From a cost perspective, VHCOX is actually cheaper than its peers.
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.
Overall, Vanguard Capital Opportunity Investor ( VHCOX ) has a low Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on the Large Cap Growth 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 VHCOX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.