Is Vanguard 500 Index Admiral (VFIAX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Index funds, consider Vanguard 500 Index Admiral (VFIAX) as a possibility. VFIAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.History of Fund/ManagerVanguard Group is based in Malvern, PA, and is the manager of VFIAX. Vanguard 500 Index Admiral made its debut in November of 2000, and since then, VFIAX has accumulated about $598.15 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.PerformanceOf course, investors look for strong performance in funds. VFIAX has a 5-year annualized total return of 15.84%, and it sits 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 17.06%, 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 VFIAX over the past three years is 15.1% compared to the category average of 14.79%. The fund's standard deviation over the past 5 years is 16.17% compared to the category average of 14.33%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsWith a 5-year beta of 1, the fund 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. VFIAX has generated a negative alpha over the past five years of -0, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsInvestigating 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 largely on equities that are traded in the United States.Currently, this mutual fund is holding 91.42% in stocks, with an average market capitalization of $420.58 billion. The fund has the heaviest exposure to the following market sectors:TechnologyFinanceRetail TradeWith turnover at about 2%, this fund makes fewer trades than its comparable peers.ExpensesFor investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VFIAX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.87%. VFIAX is actually cheaper than its peers when you consider factors like cost.While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.Bottom LineOverall, Vanguard 500 Index Admiral ( VFIAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard 500 Index Admiral ( VFIAX ) looks like a good potential choice for investors right now.For additional information on this product, or to compare it to other mutual funds in the Index, 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! 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Click to get this free report Get Your Free (VFIAX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks