Is Vanguard Institutional Total Stock Market Plus (VITPX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Large Cap Blend fund? You might want to begin with Vanguard Institutional Total Stock Market Plus (VITPX). VITPX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VITPX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
VITPX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Institutional Total Stock Market Plus made its debut in May of 2001, VITPX has garnered more than $30 billion in assets. The fund's current manager, Walter Nejman, has been in charge of the fund since April of 2016.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 14.94%, and is in the middle 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 7.75%, 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. Compared to the category average of 15.87%, the standard deviation of VITPX over the past three years is 17.97%. Looking at the past 5 years, the fund's standard deviation is 18.82% compared to the category average of 16.75%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VITPX has a 5-year beta of 1.03, which means it is likely to be as volatile as the market average. 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. Over the past 5 years, the fund has a negative alpha of -1.02. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VITPX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.86%. From a cost perspective, VITPX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100 million; each subsequent investment needs to be at least $1.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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