There are plenty of choices in the Non US - Equity category, but where should you start your research? Well, one fund that you should consider investigating is Vanguard International Growth Investor (VWIGX). VWIGX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWIGX is classified in the Non US - Equity area by Zacks, and this segment is full of potential. Non US - Equity funds focus their investments on companies outside of the United States, which is an important distinction since global mutual funds tend to keep a sizable portion of their portfolio based in the United States. Most of these funds will allocate across emerging and developed markets, and can often extend across cap levels too.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VWIGX. Since Vanguard International Growth Investor made its debut in September of 1981, VWIGX has garnered more than $6.46 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.53%, and is 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 8.28%, 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. VWIGX's standard deviation over the past three years is 14.61% compared to the category average of 11.06%. Looking at the past 5 years, the fund's standard deviation is 14.15% compared to the category average of 11%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, VWIGX lost 57% and outperformed its peer group by 1.45%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.03, the fund is likely to be as volatile as the market average. 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. VWIGX has generated a negative alpha over the past five years of -4.47, demonstrating 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, VWIGX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 1.21%. So, VWIGX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard International Growth Investor ( VWIGX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
This could just be the start of your research on VWIGXin the Non US - Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.
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Zacks Investment Research