If you've been stuck searching for Index funds, consider Vanguard Small-Cap Growth Index Fund (VISGX) 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 VISGX. Vanguard Small-Cap Growth Index Fund debuted in May of 1998. Since then, VISGX has accumulated assets of about $159.92 million, according to the most recently available information. Gerard C. O'Reilly is the fund's current manager and has held that role since December of 2004.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VISGX has a 5-year annualized total return of 9.09% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.81%, 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. The standard deviation of VISGX over the past three years is 15.63% compared to the category average of 8.85%. Over the past 5 years, the standard deviation of the fund is 15.01% compared to the category average of 9.2%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. VISGX lost 53.52% in the most recent bear market and underperformed its peer group by 10%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.12, 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. VISGX's 5-year performance has produced a negative alpha of -2.26, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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.
As of the last filing date, the mutual fund has 96.92% of its assets in stocks, which have an average market capitalization of $5.72 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is about 38%, so those in charge of the fund make fewer trades than the average comparable fund.
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, VISGX is a no load fund. It has an expense ratio of 0.19% compared to the category average of 0.86%. So, VISGX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Don't stop here for your research on Index 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 VISGX 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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