Is Vanguard International Explorer Fund (VINEX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Non US - Equity fund could think about starting with Vanguard International Explorer Fund (VINEX). VINEX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes VINEX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.

History of Fund/Manager

VINEX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard International Explorer Fund made its debut in November of 1996, and since then, VINEX has accumulated about $1.55 billion in assets, per the most up-to-date date available. Mary Pryshlak is the fund's current manager and has held that role since August of 2020.

Performance

Of course, investors look for strong performance in funds. VINEX has a 5-year annualized total return of 3.16%, and is 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 12.78%, which places it in the middle 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. VINEX's standard deviation over the past three years is 15.42% compared to the category average of 16.32%. Over the past 5 years, the standard deviation of the fund is 17.63% compared to the category average of 18.34%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.92, which means it is hypothetically less 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. With a negative alpha of -7.68, managers in this portfolio find it difficult to pick 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, VINEX is a no load fund. It has an expense ratio of 0.43% compared to the category average of 1.18%. So, VINEX is actually cheaper than its peers from a cost perspective.

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 International Explorer Fund ( VINEX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard International Explorer Fund ( VINEX ) looks like a good potential choice for investors right now.

For additional information on the Non US - Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VINEX too for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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

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