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

Sector - Precious Metal fund seekers should consider taking a look at Vanguard Global Capital Cycles Fund Investor (VGPMX). VGPMX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that VGPMX is a Sector - Precious Metal option, and this area is loaded with different options. Sector - Precious Metal funds typically invest in companies that are involved in the mining and production of precious metals like gold, silver, platinum, and palladium. Because stocks in this environment often trade as leveraged bets of the underlying commodity--they are tied to the prices of the metal--these equities tend to be volatile.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VGPMX. Vanguard Global Capital Cycles Fund Investor debuted in May of 1984. Since then, VGPMX has accumulated assets of about $3.74 billion, according to the most recently available information. The fund is currently managed by Keith White who has been in charge of the fund since July of 2018.

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 20.54%, and it sits 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 27.34%, 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 15.06% compared to the category average of 12.66%. The fund's standard deviation over the past 5 years is 16.62% compared to the category average of 15.55%. 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 0.66, so it is likely going to be less volatile than the market at large. 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 positive alpha of 10.4, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, VGPMX is a no load fund. It has an expense ratio of 0.42% compared to the category average of 0.97%. Looking at the fund from a cost perspective, VGPMX is actually cheaper than its peers.

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

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

Bottom Line

Overall, Vanguard Global Capital Cycles Fund Investor ( VGPMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Global Capital Cycles Fund Investor ( VGPMX ) looks like a good potential choice for investors right now.

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. 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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