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Is Vanguard Mid-Cap Growth Fund (VMGRX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Mid Cap Growth funds, a place to start could be Vanguard Mid-Cap Growth Fund (VMGRX - Free Report) . VMGRX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VMGRX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts impressive sales and/or earnings growth.
History of Fund/Manager
VMGRX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Mid-Cap Growth Fund debuted in December of 1997. Since then, VMGRX has accumulated assets of about $3.04 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. This fund in particular has delivered a 5-year annualized total return of 8.16%, and it sits in the bottom 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 -2.27%, which places it in the middle 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. Over the past three years, VMGRX's standard deviation comes in at 22.15%, compared to the category average of 21.88%. The standard deviation of the fund over the past 5 years is 22.37% compared to the category average of 22.42%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.13, so investors should note that it is hypothetically more volatile than the market at large. 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. VMGRX has generated a negative alpha over the past five years of -7.6, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 82.42% of its holdings in stocks, and these companies have an average market capitalization of $29.15 billion. Turnover is 74%, which means, on average, the fund makes more trades in a given year than the category average.
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, VMGRX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 1.04%. So, VMGRX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Vanguard Mid-Cap Growth Fund ( VMGRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Vanguard Mid-Cap Growth Fund ( VMGRX ) looks like a great potential choice for investors right now.
This could just be the start of your research on VMGRXin the Mid Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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Is Vanguard Mid-Cap Growth Fund (VMGRX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Mid Cap Growth funds, a place to start could be Vanguard Mid-Cap Growth Fund (VMGRX - Free Report) . VMGRX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes VMGRX as Mid Cap Growth, a segment packed with options. Mid Cap Growth mutual funds aim to target companies with a market capitalization between $2 billion and $10 billion that are also expected to exhibit more extensive growth opportunities for investors than their peers. A firm is typically considered to be a growth stock if it consistently posts impressive sales and/or earnings growth.
History of Fund/Manager
VMGRX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Mid-Cap Growth Fund debuted in December of 1997. Since then, VMGRX has accumulated assets of about $3.04 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. This fund in particular has delivered a 5-year annualized total return of 8.16%, and it sits in the bottom 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 -2.27%, which places it in the middle 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. Over the past three years, VMGRX's standard deviation comes in at 22.15%, compared to the category average of 21.88%. The standard deviation of the fund over the past 5 years is 22.37% compared to the category average of 22.42%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.13, so investors should note that it is hypothetically more volatile than the market at large. 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. VMGRX has generated a negative alpha over the past five years of -7.6, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 82.42% of its holdings in stocks, and these companies have an average market capitalization of $29.15 billion. Turnover is 74%, which means, on average, the fund makes more trades in a given year than the category average.
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, VMGRX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 1.04%. So, VMGRX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Vanguard Mid-Cap Growth Fund ( VMGRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Vanguard Mid-Cap Growth Fund ( VMGRX ) looks like a great potential choice for investors right now.
This could just be the start of your research on VMGRXin the Mid Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.