Can Vanguard Mid-Cap Index Administrative Serve as a Powerful Mutual Fund Pick At the Present Moment?
Powerful Mutual Fund Pick At the Present Moment?
The Index category offers a variety of options. But what is really worth searching for? There is actually a fund you should pay close attention to. And this fund is called Vanguard Mid-Cap Index Administrative (VIMAX). Though the Zacks Mutual Fund Rank didn’t review this fund, we analyzed the fund’s cost, volatility, and performance by ourselves.
History of Fund/Manager
Vanguard Group is located in Malvern, PA. It acts as the manager of VIMAX which was introduced to the public in November 2001. For the years of its existence, VIMAX managed to gather approximately $41.17 billion in assets. These are the latest figures stated in the reliable sources of information. Since November 2001 and till now, Donald M. Butler remains unchangeable manager of the fund.
Strong performance is what all the investors are striving for when trying to find a suitable fund. In fact, a 5-year annualized total return of this fund reached 12.75%. It is placed in the top third among the fund’s category peers. As for the not so long period of time, it’s necessary to appraise the fund’s 3-year annualized total return which is equal to 12.54%. This percentage is what enables the fund to be available in the top third within the mentioned timeframe.
The standard deviation of the returns should be also considered if you investigate the fund’s performance. If the standard deviation is low, the fund volatility is also low. The past three years have demonstrated that VIMAX’s standard deviation lined up with 9.98%, while the category average deviation was 8.81%. The past five years have demonstrated that the fund’s standard deviation reached 10.04%, while the category average reached 8.72%. It means that the fund’s volatility exceeded the volatility of its peers within the five year period of time.
The target of any investor is to make a lucrative investment. Though not all the risks can be eliminated, it’s crucial to evaluate the possible risks in order to save own money. The most recent bear market was marked by 53.51% VIMAX decline. At the same time, it outmatched the peer group by 6.96%. It means that on the declining market it’s more profitable to choose this fund instead of its peers.
But it should be noted that a 5-year beta of 0.98 equalized the volatility of this fund with the market average. It’s also necessary to pay attention to alpha which demonstrates a portfolio’s performance taking into account a risk factor and being related to a benchmark. Under these conditions, the S&P 500 serves as a benchmark.
Within the past five years, the generation of a negative alpha equal to -1.21has occurred. This situation indicates that for the portfolio managers it’s not an easy task to select securities able to ensure better-than-benchmark returns.