Is Vanguard Selected Value Fund (VASVX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Mid Cap Value fund category, Vanguard Selected Value Fund (VASVX) could be a potential option. VASVX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Mid Cap Value funds is an area filled with options, like VASVX. Targeting medium-sized companies with a market cap between $2 billion and $10 billion, Mid Cap Value mutual funds more often than not choose stocks that hold solid value and income investment opportunities.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VASVX. Since Vanguard Selected Value Fund made its debut in February of 1996, VASVX has garnered more than $6.98 billion in assets. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. VASVX has a 5-year annualized total return of 11.31%, 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 14.13%, 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. Compared to the category average of 14.26%, the standard deviation of VASVX over the past three years is 15.29%. The fund's standard deviation over the past 5 years is 17.88% compared to the category average of 16.74%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.92, 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. Over the past 5 years, the fund has a negative alpha of -0.3. This means that 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, VASVX is a no load fund. It has an expense ratio of 0.33% compared to the category average of 0.93%. So, VASVX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should 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 Selected Value Fund ( VASVX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Selected Value Fund ( VASVX ) looks like a good potential choice for investors right now.

Want even more information about VASVX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

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

Zacks Investment Research