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Is Vanguard US Growth Investor (VWUSX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard US Growth Investor (VWUSX). VWUSX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify VWUSX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.

History of Fund/Manager

Vanguard Group is responsible for VWUSX, and the company is based out of Malvern, PA. Vanguard US Growth Investor debuted in August of 1961. Since then, VWUSX has accumulated assets of about $11.79 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. VWUSX has a 5-year annualized total return of 24.46% and is 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 25.32%, which places it in the top third during this time-frame.

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 17.61%, the standard deviation of VWUSX over the past three years is 21.71%. Over the past 5 years, the standard deviation of the fund is 17.67% compared to the category average of 14.75%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.1, so investors should note that 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. VWUSX has generated a positive alpha over the past five years of 6.11, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWUSX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 1.03%. VWUSX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.

Bottom Line

Overall, Vanguard US Growth Investor ( VWUSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Large Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VWUSX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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