Are you on the hunt for a Large Cap Blend fund? You should think about starting with Vanguard Total Stock Market Index Investor (VTSMX). While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
We note that VTSMX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a ‘buy and hold’ mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
VTSMX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Total Stock Market Index Investor debuted in April of 1992. Since then, VTSMX has accumulated assets of about $25.84 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 11.63%, and it sits in the middle 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 18.71%, 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. Over the past three years, VTSMX’s standard deviation comes in at 12.82%, compared to the category average of 11.32%. Over the past 5 years, the standard deviation of the fund is 15.71% compared to the category average of 13.37%. 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 1.01, which means it is hypothetically as volatile as the market at large. 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. VTSMX has generated a negative alpha over the past five years of -1.21, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
