If you have been looking for Index fund category, a potential starting could be Invesco Equally-Weighted S&P 500 A (VADAX - Free Report) . VADAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Invesco is based in Kansas City, MO, and is the manager of VADAX. Since Invesco Equally-Weighted S&P 500 A made its debut in July of 1997, VADAX has garnered more than $2.29 billion in assets. The fund is currently managed by a team of investment professionals.
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 8.91%, and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.42%, which places it in the middle 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 9.33%, the standard deviation of VADAX over the past three years is 11.55%. Over the past 5 years, the standard deviation of the fund is 11.79% compared to the category average of 9.71%. 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. VADAX lost 54.33% in the most recent bear market and underperformed its peer group by 4.96%. 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 1.03, so investors should note that 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. VADAX has generated a negative alpha over the past five years of -2.01, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
This fund is currently holding about 78.17% stock in stocks, and these companies have an average market capitalization of $48.85 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Turnover is about 20%, so those in charge of the fund make fewer trades than comparable funds.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VADAX is a load fund. It has an expense ratio of 0.53% compared to the category average of 0.96%. So, VADAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Overall, Invesco Equally-Weighted S&P 500 A ( VADAX ) has a neutral Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
For additional information on the Index 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 VADAX 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.