Is Vanguard Selected Value Fund (VASVX) a Good Choice for Mutual Fund Investors at This Time?

Exploring Vanguard Selected Value Fund (VASVX)

If you're searching for a Mid Cap Value mutual fund, Vanguard Selected Value Fund (VASVX) is worth considering. VASVX currently holds a top Zacks Mutual Fund Rank of 1 (Strong Buy), which reflects an analysis of factors such as fund size, expenses, and historical returns.

Fund Purpose

VASVX is among several options in the Mid Cap Value category. These funds typically invest in companies with market capitalizations ranging from $2 billion to $10 billion. Such mid-sized businesses often present attractive value and income prospects for investors.

Background and Management

VASVX is managed by the Vanguard Group, headquartered in Malvern, Pennsylvania. Since its inception in February 1996, the fund has accumulated over $6.53 billion in assets. A team of experienced investment professionals oversees the fund's portfolio.

Fund Performance Overview

Performance is a key consideration for investors. Over the past five years, VASVX has delivered an average annual return of 13.18%, placing it in the top third of its peer group. Its three-year annualized return stands at 11.85%, also ranking in the upper third among similar funds.

Keep in mind that reported returns may not account for all associated costs. Any unaccounted fees would reduce overall returns. Additionally, total returns do not include the fund’s sales charge; including these charges would result in lower returns.

Volatility is another important aspect to evaluate. VASVX’s three-year standard deviation is 16.02%, slightly higher than the category average of 15.65%. Over five years, its standard deviation is 18.37%, compared to the category average of 16.99%, indicating that the fund has experienced more price fluctuations than many of its peers during this period.

Assessing Risk

Risk metrics like beta are crucial for understanding how a fund moves relative to the broader market. VASVX has a five-year beta of 0.97, suggesting its volatility is similar to the overall market. Alpha, which measures risk-adjusted performance against a benchmark (the S&P 500 in this case), is also important. VASVX’s alpha is -0.73, indicating that the fund has struggled to outperform its benchmark after adjusting for risk.

Cost Structure

As competition among mutual funds intensifies, keeping an eye on expenses is essential. Lower-cost funds often have an advantage when all else is equal. VASVX is a no-load fund with an expense ratio of 0.34%.

The minimum initial investment required is $3,000, with subsequent investments starting at $1. Note that investment advisor fees are not included in these figures; if they were, net returns would be lower.

Conclusion

VASVX ranks among the top 20% of all mutual funds tracked by Zacks, making it a strong candidate for investors interested in the Mid Cap Value segment.