Is Vanguard Small-Cap Growth Index Admiral (VSGAX) a Strong Mutual Fund Pick Right Now?

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Are you on the hunt for a Mutual Fund Equity Report fund? You should think about starting with Vanguard Small-Cap Growth Index Admiral (VSGAX). 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 responsible for VSGAX, and the company is based out of Malvern, PA. Vanguard Small-Cap Growth Index Admiral debuted in September of 2011. Since then, VSGAX has accumulated assets of about $14.36 billion, according to the most recently available information. The fund’s current manager, Gerard O’Reilly, has been in charge of the fund since September of 2011.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.64%, 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 11.84%, 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. Over the past three years, VSGAX’s standard deviation comes in at 22.88%, compared to the category average of 17.79%. The fund’s standard deviation over the past 5 years is 20.59% compared to the category average of 15.89%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.15, so it is likely going to be more volatile than the market at large. 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. VSGAX’s 5-year performance has produced a negative alpha of -4.18, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 principally on equities that are traded in the United States.

The mutual fund currently has 92.34% of its holdings in stocks, which have an average market capitalization of $7.70 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Health

  3. Industrial Cyclical

  4. Other

Turnover is 29%, which means this fund makes 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, VSGAX is a no load fund. It has an expense ratio of 0.07% compared to the category average of 0.78%. VSGAX 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 $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. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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