Is Vanguard PRIMECAP Core Investor (VPCCX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Growth fund could think about starting with Vanguard PRIMECAP Core Investor (VPCCX). VPCCX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
VPCCX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
Vanguard Group is based in Malvern, PA, and is the manager of VPCCX. Vanguard PRIMECAP Core Investor debuted in December of 2004. Since then, VPCCX has accumulated assets of about $12.88 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 15.86%, 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 22.58%, 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 VPCCX over the past three years is 14.3% compared to the category average of 13.07%. The standard deviation of the fund over the past 5 years is 15.73% compared to the category average of 13.51%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.94, the fund is likely to be less volatile than 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. VPCCX’s 5-year performance has produced a positive alpha of 0.28, which means 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, VPCCX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 0.87%. From a cost perspective, VPCCX is actually cheaper than its peers.
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.
Overall, Vanguard PRIMECAP Core Investor ( VPCCX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
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This article originally published on Zacks Investment Research (zacks.com).