Any investors who are searching for Mutual Fund Equity Report funds should take a look at Vanguard Extended Market Index Institutional (VIEIX). 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
VIEIX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Extended Market Index Institutional debuted in July of 1997. Since then, VIEIX has accumulated assets of about $14 billion, according to the most recently available information. The fund is currently managed by Donald Butler 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. VIEIX has a 5-year annualized total return of 6.83% and is 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 9.21%, which places it in the bottom 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. VIEIX’s standard deviation over the past three years is 27.14% compared to the category average of 18.45%. Over the past 5 years, the standard deviation of the fund is 23.88% compared to the category average of 16.36%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.19, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -3.39, which shows 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 largely on equities that are traded in the United States.
The mutual fund currently has 98.93% of its holdings in stocks, and these companies have an average market capitalization of $9.94 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Industrial Cyclical
With turnover at about 11%, this fund is making fewer trades than the average comparable fund.
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, VIEIX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.97%. From a cost perspective, VIEIX is actually cheaper than its peers.
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
Your research on the Mutual Fund Equity Report segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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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