Index fund seekers should consider taking a look at Vanguard Institutional Index Fund (VINIX). VINIX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
VINIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Institutional Index Fund made its debut in July of 1990, and since then, VINIX has accumulated about $125.82 billion in assets, per the most up-to-date date available. The fund’s current manager, Michelle Louie, has been in charge of the fund since November of 2017.
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 15.84%, 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 17.06%, 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. Compared to the category average of 15.26%, the standard deviation of VINIX over the past three years is 15.1%. The standard deviation of the fund over the past 5 years is 16.16% compared to the category average of 14.81%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1, so it is likely going to be as volatile as 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. VINIX’s 5-year performance has produced a positive alpha of 0.01, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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.