Is Vanguard 500 Index Investor (VFINX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Index fund category, Vanguard 500 Index Investor (VFINX) could be a potential option. VFINX carries 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/ManagerVFINX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard 500 Index Investor made its debut in August of 1976, and since then, VFINX has accumulated about $2.94 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.PerformanceObviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 15.72%, and is in the top 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 16.94%, 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. Over the past three years, VFINX's standard deviation comes in at 15.09%, compared to the category average of 14.79%. The standard deviation of the fund over the past 5 years is 16.19% compared to the category average of 14.33%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 1, so it is likely going to be as volatile as 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. The fund has produced a negative alpha over the past 5 years of -0.12, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsExploring 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 91.5% in stocks, which have an average market capitalization of $420.58 billion.Turnover is about 2%, so those in charge of the fund make fewer trades than its comparable peers.ExpensesAs 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. It has an expense ratio of 0.14% compared to the category average of 0.87%. VFINX is actually cheaper than its peers when you consider factors like cost.This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.Bottom LineOverall, Vanguard 500 Index Investor ( VFINX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.Want even more information about VFINX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.Beyond Nvidia: AI's Second Wave Is HereThe AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.See "2nd Wave" AI stocks now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (VFINX): 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