Is Vanguard Total Stock Market Index Admiral (VTSAX) a Strong Mutual Fund Pick Right Now?

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If you’ve been stuck searching for Mutual Fund Equity Report funds, consider Vanguard Total Stock Market Index Admiral (VTSAX) as a possibility. 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

Vanguard Group is based in Malvern, PA, and is the manager of VTSAX. Vanguard Total Stock Market Index Admiral made its debut in November of 2000, and since then, VTSAX has accumulated about $295.05 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 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 12.1%, and it sits in the middle 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 12.42%, 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, VTSAX’s standard deviation comes in at 20.01%, compared to the category average of 16.03%. Over the past 5 years, the standard deviation of the fund is 17.95% compared to the category average of 14.39%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

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. 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. VTSAX’s 5-year performance has produced a negative alpha of -0.89, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 primarily on equities that are traded in the United States.

This fund is currently holding about 99.46% stock in stocks, which have an average market capitalization of $350.12 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Finance

  3. Retail Trade

With turnover at about 4%, this fund is making fewer trades than its comparable peers.

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, VTSAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.79%. Looking at the fund from a cost perspective, VTSAX is actually cheaper than its peers.

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

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 VTSAX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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