Is Vanguard Global Capital Cycles Fund Investor (VGPMX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Sector - Precious Metal funds, a place to start could be Vanguard Global Capital Cycles Fund Investor (VGPMX). VGPMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Sector - Precious Metal funds is an area filled with options, such as VGPMX. Usually, Sector - Precious Metal mutual funds invest in stocks with a focus on the mining and production of precious metals like gold, silver, platinum, and palladium. Here, stocks often trade as leveraged bets of the underlying commodity, meaning they're tied to the metal's prices and can be volatile.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VGPMX. Since Vanguard Global Capital Cycles Fund Investor made its debut in May of 1984, VGPMX has garnered more than $3.59 billion in assets. Keith White is the fund's current manager and has held that role since July of 2018.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 22.14%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 25.18%, 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. The standard deviation of VGPMX over the past three years is 14.9% compared to the category average of 12.92%. The standard deviation of the fund over the past 5 years is 16.04% compared to the category average of 15.25%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.64, which means it is hypothetically less 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. VGPMX's 5-year performance has produced a positive alpha of 11.07, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

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, VGPMX is a no load fund and it has an expense ratio of 0.43%.

Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

This puts this fund from Vanguard Group in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Sector - Precious Metal category.

This could just be the start of your research on VGPMX in the Sector - Precious Metal 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. 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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