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Is Vanguard Mid-Cap Value Index Investor (VMVIX) a Strong Mutual Fund Pick Right Now?

Mutual Fund Report for VMVIX

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This story originally appeared on Zacks

Any investors who are searching for Mutual Fund Equity Report funds should take a look at Vanguard Mid-Cap Value Index Investor (VMVIX). 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 VMVIX. The Vanguard Mid-Cap Value Index Investor made its debut in August of 2006 and VMVIX has managed to accumulate roughly $54.21 million in assets, as of the most recently available information. Donald Butler is the fund's current manager and has held that role since September of 2011.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 10.38%, 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 12.32%, 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 19.92%, the standard deviation of VMVIX over the past three years is 22.91%. The fund's standard deviation over the past 5 years is 18.47% compared to the category average of 16.21%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.12, the fund is likely to be more volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. VMVIX's 5-year performance has produced a negative alpha of -7.71, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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.

Right now, 94.16% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $24.14 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Industrial Cyclical
  3. Non-Durable
  4. Utilities

Turnover is 16%, which means, on average, the fund makes 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, VMVIX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 1.12%. From a cost perspective, VMVIX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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.



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