Is Vanguard Tax-Managed Small Cap Investor (VTMSX) a Strong Mutual Fund Pick Right Now?

If you have been looking for Small Cap Blend funds, a place to start could be Vanguard Tax-Managed Small Cap Investor (VTMSX). VTMSX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveZacks categorizes VTMSX as Small Cap Blend, which is an area packed with options. Usually targeting stocks with market caps of less than $2 billion, a Small Cap Blend mutual fund lets investors diversify their funds among other kinds of small-cap equities. This can help reduce risk found in companies that have a lower stock market valuation.History of Fund/ManagerVanguard Group is based in Malvern, PA, and is the manager of VTMSX. Since Vanguard Tax-Managed Small Cap Investor made its debut in April of 1999, VTMSX has garnered more than $9.25 billion in assets. The fund is currently managed by Walter Nejman who has been in charge of the fund since February of 2023.PerformanceInvestors naturally seek funds with strong performance. VTMSX has a 5-year annualized total return of 10.78% and is in the middle 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 6.28%, 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. Over the past three years, VTMSX's standard deviation comes in at 22.71%, compared to the category average of 17.6%. Looking at the past 5 years, the fund's standard deviation is 24.05% compared to the category average of 19.29%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 1.12, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -4.75, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsExploring 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 mostly on equities that are traded in the United States.Currently, this mutual fund is holding 78.25% in stocks, which have an average market capitalization of $3.77 billion. The fund has the heaviest exposure to the following market sectors: Finance Industrial Cyclical Technology With turnover at about 12%, this fund makes fewer trades than its comparable peers.ExpensesFor 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, VTMSX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 0.97%. So, VTMSX is actually cheaper than its peers from a cost perspective.Investors should also note that the minimum initial investment for the product is $10,000 and that each subsequent investment needs to be at $1Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.Bottom LineOverall, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Tax-Managed Small Cap Investor ( VTMSX ) looks like a great potential choice for investors right now.Want even more information about VTMSX? 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.Zacks Naming Top 10 Stocks for 2025Want to be tipped off early to our 10 top picks for the entirety of 2025?History suggests their performance could be sensational.From 2012 (when our Director of Research Sheraz Mian assumed responsibility for the portfolio) through November, 2024, the Zacks Top 10 Stocks gained +2,112.6%, more than QUADRUPLING the S&P 500’s +475.6%. Now Sheraz is combing through 4,400 companies to handpick the best 10 tickers to buy and hold in 2025. Don’t miss your chance to get in on these stocks when they’re released on January 2.Be First to New Top 10 Stocks >>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 Get Your Free (VTMSX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks