Is Vanguard US Growth Admiral (VWUAX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should consider taking a look at Vanguard US Growth Admiral (VWUAX). VWUAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWUAX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
VWUAX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard US Growth Admiral debuted in August of 2001. Since then, VWUAX has accumulated assets of about $34.03 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWUAX has a 5-year annualized total return of 23.38% 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 26.4%, 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 VWUAX over the past three years is 21.65% compared to the category average of 17.36%. The fund's standard deviation over the past 5 years is 17.69% compared to the category average of 14.47%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.08, 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. With a positive alpha of 5.27, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWUAX is a no load fund. It has an expense ratio of 0.28% compared to the category average of 1.03%. VWUAX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $50,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard US Growth Admiral ( VWUAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard US Growth Admiral ( VWUAX ) looks like a good potential choice for investors right now.
Want even more information about VWUAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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