Is Vanguard PRIMECAP Fund Investor (VPMCX) a Strong Mutual Fund Pick Right Now?
Mutual Fund Report for VPMCX
Having trouble finding a Large Cap Growth fund? Vanguard PRIMECAP Fund Investor (VPMCX) is a potential starting point. VPMCX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
VPMCX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VPMCX. Vanguard PRIMECAP Fund Investor debuted in November of 1984. Since then, VPMCX has accumulated assets of about $6.67 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 18.7%, and it sits in the top 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 15.93%, 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. VPMCX's standard deviation over the past three years is 18.78% compared to the category average of 17.09%. Looking at the past 5 years, the fund's standard deviation is 15.46% compared to the category average of 14.02%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.97, so investors should note that it is hypothetically as volatile as 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. Over the past 5 years, the fund has a positive alpha of 1.63. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, VPMCX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 1.02%. From a cost perspective, VPMCX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Overall, Vanguard PRIMECAP Fund Investor ( VPMCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard PRIMECAP Fund Investor ( VPMCX ) looks like a good potential choice for investors right now.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VPMCX too 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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