If you've been stuck searching for Large Cap Value funds, consider Vanguard Windsor-II Investor (
VWNFX Quick Quote VWNFX - Free Report) as a possibility. VWNFX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance. Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWNFX. Vanguard Windsor-II Investor debuted in June of 1985. Since then, VWNFX has accumulated assets of about $12.43 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Investors naturally seek funds with strong performance. VWNFX has a 5-year annualized total return of 6.73% 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 10.82%, 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. Over the past three years, VWNFX's standard deviation comes in at 12.59%, compared to the category average of 11.07%. The standard deviation of the fund over the past 5 years is 12.93% compared to the category average of 10.91%. This makes the fund more volatile than its peers over the past half-decade.
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 the most recent bear market, VWNFX lost 52.87% and underperformed its peer group by 2%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
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. 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. Over the past 5 years, the fund has a negative alpha of -4.04. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining 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 87.8% stock in stocks, with an average market capitalization of $197.25 billion. The fund has the heaviest exposure to the following market sectors:
Finance Technology Industrial Cyclical
Turnover is about 56%, so those in charge of the fund make fewer trades than the average comparable fund.
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, VWNFX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 1.01%. From a cost perspective, VWNFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Overall, Vanguard Windsor-II Investor ( VWNFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Don't stop here for your research on Large Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out
www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VWNFX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.