Are you on the hunt for an Index fund? You should think about starting with Vanguard Mid-Cap Index Investor (VIMSX Quick QuoteVIMSX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

History of Fund/Manager

VIMSX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. The Vanguard Mid-Cap Index Investor made its debut in May of 1998 and VIMSX has managed to accumulate roughly $844.58 million in assets, as of the most recently available information. The fund is currently managed by Donald M. Butler who has been in charge of the fund since May of 1998.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 9.07%, and is in the top 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 10.54%, 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. VIMSX's standard deviation over the past three years is 13.31% compared to the category average of 9.03%. The fund's standard deviation over the past 5 years is 12.78% compared to the category average of 9.41%. 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 VIMSX's case, the fund lost 53.58% in the most recent bear market and underperformed comparable funds by 10%. This might suggest that the fund is a worse choice than its peers during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as 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 -1.8, 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.

The mutual fund currently has 84.96% of its holdings in stocks, which have an average market capitalization of $17.20 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology
2. Finance

Expenses

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, VIMSX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.86%. VIMSX is actually cheaper than its peers when you consider factors like cost.

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.

Bottom Line

For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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.