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Is Vanguard Mid-Cap Growth Index Admiral (VMGMX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Index funds, consider Vanguard Mid-Cap Growth Index Admiral (VMGMX - Free Report) as a possibility. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

History of Fund/Manager

VMGMX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Mid-Cap Growth Index Admiral made its debut in September of 2011, and since then, VMGMX has accumulated about $8.02 billion in assets, per the most up-to-date date available. The fund is currently managed by Donald M. Butler who has been in charge of the fund since February of 2013.

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 9.72%, 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 14.75%, 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 fund's standard deviation over the past 5 years is 13.14% compared to the category average of 0.86%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.

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. 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. VMGMX has generated a negative alpha over the past five years of -1.31, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, VMGMX is a no load fund and it has an expense ratio of 0.07%.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.

Bottom Line

This could just be the start of your research on VMGMXin 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.


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