Is Vanguard Institutional Index Fund (VINIX) a Strong Mutual Fund Pick Right Now?
Looking for an Index fund? You may want to consider Vanguard Institutional Index Fund (VINIX) as a possible option. VINIX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is responsible for VINIX, and the company is based out of Malvern, PA. The Vanguard Institutional Index Fund made its debut in July of 1990 and VINIX has managed to accumulate roughly $114.41 billion in assets, as of the most recently available information. The fund is currently managed by Donald M. Butler who has been in charge of the fund since December of 2000.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.3%, and it sits in the top 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 13.32%, which places it in the top 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. Over the past three years, VINIX's standard deviation comes in at 12.12%, compared to the category average of 7.75%. The standard deviation of the fund over the past 5 years is 11.99% compared to the category average of 8.86%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. VINIX lost 50.9% in the most recent bear market and underperformed its peer group by 5%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1, which means it is hypothetically as volatile as 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. VINIX has generated a negative alpha over the past five years of -0.03, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining 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 78.75% stock in stocks, which have an average market capitalization of $208.07 billion. The fund has the heaviest exposure to the following market sectors:
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VINIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.76%. So, VINIX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $5 million, and each subsequent investment should be at least $1.
This could just be the start of your research on VINIXin the Index category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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