Is Vanguard Selected Value Fund (VASVX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Mid Cap Value fund? Starting with Vanguard Selected Value Fund (VASVX) is one possibility. VASVX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

VASVX is one of many Mid Cap Value mutual funds to choose from. Mid Cap Value funds usually invest in companies with a stock market valuation between $2 billion and $10 billion; these medium-sized firms possess strong value and income opportunities for investors.

History of Fund/Manager

VASVX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Selected Value Fund made its debut in February of 1996, VASVX has garnered more than $6.53 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 13.18%, and it sits 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 11.85%, 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 VASVX over the past three years is 16.02% compared to the category average of 15.65%. The fund's standard deviation over the past 5 years is 18.37% compared to the category average of 16.99%. 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. VASVX has a 5-year beta of 0.97, which means it is likely to be as volatile as the market average. 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. With a negative alpha of -0.73, 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, VASVX is a no load fund and it has an expense ratio of 0.34%.

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 Mid Cap Value category.

Your research on the Mid Cap Value segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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This article originally published on Zacks Investment Research (zacks.com).

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