Investors in search of a Index fund might want to consider looking at Vanguard 500 Index Investor (VFINX). VFINX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Vanguard Group is based in Malvern, PA, and is the manager of VFINX. Vanguard 500 Index Investor made its debut in August of 1976, and since then, VFINX has accumulated about $2.87 billion in assets, per the most up-to-date date available. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 14.83%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.94%, which places it in the top third during this time-frame.
It is important to note that the product’s returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund’s [%] sale charge. If sales charges were included, total returns would have been lower.
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 VFINX over the past three years is 11.64% compared to the category average of 11.76%. Looking at the past 5 years, the fund’s standard deviation is 15.02% compared to the category average of 13.45%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VFINX has a 5-year beta of 1, which means it is likely to be as volatile as the market average. 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. Over the past 5 years, the fund has a negative alpha of -0.17. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VFINX is a no load fund and it has an expense ratio of 0.14%.
