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Is Vanguard Extended Market Index Admiral (VEXAX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Small Cap Blend funds, a place to start could be Vanguard Extended Market Index Admiral (VEXAX - Free Report) . VEXAX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VEXAX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is responsible for VEXAX, and the company is based out of Malvern, PA. Vanguard Extended Market Index Admiral debuted in November of 2000. Since then, VEXAX has accumulated assets of about $19.89 billion, according to the most recently available information. The fund is currently managed by Donald M. Butler who has been in charge of the fund since November of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.32%, 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 10.66%, 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. VEXAX's standard deviation over the past three years is 14.9% compared to the category average of 9.72%. Looking at the past 5 years, the fund's standard deviation is 14.73% compared to the category average of 10.05%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VEXAX's case, the fund lost 52.72% in the most recent bear market and underperformed its peer group by 1.97%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.13, so investors should note that it is hypothetically more 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 -2.92, 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 principally on equities that are traded in the United States.
Right now, 81.88% of this mutual fund's holdings are stocks, which have an average market capitalization of $6.65 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Other
Industrial Cyclical
Turnover is about 10%, so those in charge of the fund make 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, VEXAX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 1%. VEXAX is actually cheaper than its peers when you consider factors like cost.
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.
Bottom Line
Overall, Vanguard Extended Market Index Admiral ( VEXAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
This could just be the start of your research on VEXAXin the Small Cap Blend 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.
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Is Vanguard Extended Market Index Admiral (VEXAX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Small Cap Blend funds, a place to start could be Vanguard Extended Market Index Admiral (VEXAX - Free Report) . VEXAX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VEXAX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.
History of Fund/Manager
Vanguard Group is responsible for VEXAX, and the company is based out of Malvern, PA. Vanguard Extended Market Index Admiral debuted in November of 2000. Since then, VEXAX has accumulated assets of about $19.89 billion, according to the most recently available information. The fund is currently managed by Donald M. Butler who has been in charge of the fund since November of 2000.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.32%, 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 10.66%, 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. VEXAX's standard deviation over the past three years is 14.9% compared to the category average of 9.72%. Looking at the past 5 years, the fund's standard deviation is 14.73% compared to the category average of 10.05%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VEXAX's case, the fund lost 52.72% in the most recent bear market and underperformed its peer group by 1.97%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Even still, the fund has a 5-year beta of 1.13, so investors should note that it is hypothetically more 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 -2.92, 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 principally on equities that are traded in the United States.
Right now, 81.88% of this mutual fund's holdings are stocks, which have an average market capitalization of $6.65 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Other
- Industrial Cyclical
Turnover is about 10%, so those in charge of the fund make 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, VEXAX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 1%. VEXAX is actually cheaper than its peers when you consider factors like cost.
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.
Bottom Line
Overall, Vanguard Extended Market Index Admiral ( VEXAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
This could just be the start of your research on VEXAXin the Small Cap Blend 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.