Is Vanguard Growth Index Institutional (VIGIX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should consider taking a look at Vanguard Growth Index Institutional (VIGIX). VIGIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
We classify VIGIX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VIGIX. Since Vanguard Growth Index Institutional made its debut in May of 1998, VIGIX has garnered more than $14.19 billion in assets. The fund is currently managed by Gerard C. O'Reilly who has been in charge of the fund since May of 1998.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 11.06%, and is 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 13.78%, which places it in the middle third during this time-frame.
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 VIGIX over the past three years is 13.08% compared to the category average of 10.15%. Over the past 5 years, the standard deviation of the fund is 12.99% compared to the category average of 10.44%. This makes the fund more volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VIGIX lost 47.07% and outperformed its peer group by 1.79%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.07, which means it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a positive alpha of 0.77. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
For 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, VIGIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 1.06%. From a cost perspective, VIGIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $5 million and that each subsequent investment needs to be at $1.
Overall, Vanguard Growth Index Institutional ( VIGIX ) has a high Zacks Mutual Fund rank, similar performance, average downside risk, and lower fees compared to its peers.
Don't stop here for your research on Large Cap Growth 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 VIGIX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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