There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard PRIMECAP Fund Investor (VPMCX). VPMCX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VPMCX. Vanguard PRIMECAP Fund Investor made its debut in November of 1984, and since then, VPMCX has accumulated about $4.80 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 8.71%, and it sits in the middle 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 9.72%, 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. The standard deviation of VPMCX over the past three years is 20.1% compared to the category average of 19.17%. Looking at the past 5 years, the fund’s standard deviation is 18.63% compared to the category average of 16.9%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.96, so investors should note that it is hypothetically less 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. VPMCX has generated a negative alpha over the past five years of -0.34, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 mostly on equities that are traded in the United States.
This fund is currently holding about 95.67% stock in stocks, which have an average market capitalization of $209.08 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
With turnover at about 3%, this fund is making fewer trades than the average comparable fund.
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VPMCX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 0.99%. From a cost perspective, VPMCX is actually cheaper than its peers.
Investors should also note, that according to our data, the fund does not have any minimum investment requirements.
Overall, Vanguard PRIMECAP Fund Investor ( VPMCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard PRIMECAP Fund Investor ( VPMCX ) looks like a great potential choice for investors right now.
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. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.