Is Vanguard Tax-Managed Cap Appreciation Institutional a Strong Mutual Fund Pick Right Now?

On the lookout for a Large Cap Growth fund? Starting with Vanguard Tax-Managed Cap Appreciation Institutional VTCIX is one possibility. VTCIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

VTCIX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

Vanguard Group is responsible for VTCIX, and the company is based out of Malvern, PA. Vanguard Tax-Managed Cap Appreciation Institutional debuted in February of 1999. Since then, VTCIX has accumulated assets of about $2.89 billion, according to the most recently available information. Awais Khan is the fund's current manager and has held that role since July of 2021.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.99%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.11%, 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. The standard deviation of VTCIX over the past three years is 17.77% compared to the category average of 15.75%. Over the past 5 years, the standard deviation of the fund is 18.89% compared to the category average of 16.85%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VTCIX has a 5-year beta of 1.02, which means it is likely to be as volatile as 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. VTCIX's 5-year performance has produced a negative alpha of -0.32, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTCIX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.86%. VTCIX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $5 million, and each subsequent investment should be at least $1.

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

Bottom Line

Overall, Vanguard Tax-Managed Cap Appreciation Institutional ( VTCIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Tax-Managed Cap Appreciation Institutional ( VTCIX ) looks like a good potential choice for investors right now.

Want even more information about VTCIX? 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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