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Is Vanguard Total Stock Market Index Admiral (VTSAX) a Strong Mutual Fund Pick Right Now?

·4 min read

Investors in search of a Mutual Fund Equity Report fund might want to consider looking at Vanguard Total Stock Market Index Admiral (VTSAX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VTSAX. The Vanguard Total Stock Market Index Admiral made its debut in November of 2000 and VTSAX has managed to accumulate roughly $321.58 billion in assets, as of the most recently available information. The fund is currently managed by Gerard O'Reilly who has been in charge of the fund since November of 2000.

Performance

Of course, investors look for strong performance in funds. VTSAX has a 5-year annualized total return of 16.08% and it sits in the top 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 19.85%, 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. Over the past three years, VTSAX's standard deviation comes in at 18.35%, compared to the category average of 15.02%. Over the past 5 years, the standard deviation of the fund is 16.33% compared to the category average of 13.2%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.03, the fund is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -1.02. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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.

The mutual fund currently has 98.04% of its holdings in stocks, with an average market capitalization of $310.15 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Finance

  3. Retail Trade

This fund's turnover is about 6%, so the fund managers are making fewer trades than the average comparable fund.

Expenses

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, VTSAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.77%. Looking at the fund from a cost perspective, VTSAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.

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 want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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