Is Vanguard Small-Cap Growth Index Institutional (VSGIX) a Strong Mutual Fund Pick Right Now?

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Investors in search of a Mutual Fund Equity Report fund might want to consider looking at Vanguard Small-Cap Growth Index Institutional (VSGIX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

– Zacks

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VSGIX. Vanguard Small-Cap Growth Index Institutional made its debut in May of 2000, and since then, VSGIX has accumulated about $3.75 billion in assets, per the most up-to-date date available. The fund is currently managed by Gerard O’Reilly who has been in charge of the fund since September of 2011.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 16.68%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 18.62%, 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 18.6%, the standard deviation of VSGIX over the past three years is 23.56%. The standard deviation of the fund over the past 5 years is 19.63% compared to the category average of 15.33%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.13, the fund is likely to be more volatile than the market average. 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 -2.48. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

Currently, this mutual fund is holding 75.97% stock in stocks, with an average market capitalization of $7.96 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Health
  3. Other
  4. Industrial Cyclical

This fund’s turnover is about 32%, so the fund managers are making 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, VSGIX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.78%. VSGIX 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 $5 million and that each subsequent investment needs to be at $1.

Bottom Line

Don’t stop here for your research on Mutual Fund Equity Report 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 VSGIX to its peers 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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