Is Vanguard Strategic Small Cap Equity (VSTCX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Small Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Strategic Small Cap Equity (VSTCX). VSTCX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveVSTCX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.History of Fund/ManagerVSTCX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Strategic Small Cap Equity debuted in April of 2006. Since then, VSTCX has accumulated assets of about $1.81 billion, according to the most recently available information. The fund's current manager, Cesar Orosco, has been in charge of the fund since February of 2021.PerformanceInvestors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 16.19%, and it sits 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 15.04%, 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. VSTCX's standard deviation over the past three years is 22.48% compared to the category average of 21.75%. The fund's standard deviation over the past 5 years is 21.49% compared to the category average of 20.56%. 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 1.13, which means it is hypothetically more volatile than 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 positive alpha over the past 5 years of 0.74, which shows that managers in this portfolio are skilled in picking 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 mostly on equities that are traded in the United States.Right now, 90.08% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $4.63 billion. The fund has the heaviest exposure to the following market sectors:FinanceTechnologyIndustrial CyclicalOtherThis fund's turnover is about 64%, so the fund managers are making more trades per year than the comparable average.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, VSTCX is a no load fund. It has an expense ratio of 0.26% compared to the category average of 1.01%. Looking at the fund from a cost perspective, VSTCX is actually cheaper than its peers.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 Strategic Small Cap Equity ( VSTCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Strategic Small Cap Equity ( VSTCX ) looks like a good potential choice for investors right now.Don't stop here for your research on Small Cap Blend funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VSTCX to its peers 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.Free Report: Profiting from the 2nd Wave of AI ExplosionThe next phase of the AI explosion is poised to create significant wealth for investors, especially those who get in early. It will add literally trillion of dollars to the economy and revolutionize nearly every part of our lives.Investors who bought shares like Nvidia at the right time have had a shot at huge gains.But the rocket ride in the "first wave" of AI stocks may soon come to an end. The sharp upward trajectory of these stocks will begin to level off, leaving exponential growth to a new wave of cutting-edge companies.Zacks' AI Boom 2.0: The Second Wave report reveals 4 under-the-radar companies that may soon be shining stars of AI’s next leap forward.Access AI Boom 2.0 now, absolutely free >>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 (VSTCX): 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