Is Vanguard Institutional Total Stock Market Plus (VITPX) a Strong Mutual Fund Pick Right Now?
Looking for a Large Cap Blend fund? You may want to consider Vanguard Institutional Total Stock Market Plus (VITPX) as a possible option. VITPX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VITPX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Vanguard Group is responsible for VITPX, and the company is based out of Malvern, PA. Since Vanguard Institutional Total Stock Market Plus made its debut in May of 2001, VITPX has garnered more than $34.53 billion in assets. The fund's current manager, Walter Nejman, has been in charge of the fund since April of 2016.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 17.37%, and is 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 18.06%, 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. VITPX's standard deviation over the past three years is 19.48% compared to the category average of 15.86%. Over the past 5 years, the standard deviation of the fund is 15.7% compared to the category average of 13.19%. 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 1.04, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VITPX has generated a negative alpha over the past five years of -0.35, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
Right now, 90.96% of this mutual fund's holdings are stocks, with an average market capitalization of $247.16 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
This fund's turnover is about 11%, so the fund managers are making fewer trades than comparable funds.
Expenses
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, VITPX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.95%. From a cost perspective, VITPX is actually cheaper than its peers.
This fund requires a minimum initial investment of $100 million, and each subsequent investment should be at least $1.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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