Any investors who are searching for Non US – Equity funds should take a look at Vanguard Emerging Markets Stock Index Investor (VEIEX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
Zacks categorizes VEIEX as Non US – Equity, a segment stacked high with options. Non US – Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VEIEX. Vanguard Emerging Markets Stock Index Investor debuted in May of 1994. Since then, VEIEX has accumulated assets of about $72.08 million, according to the most recently available information. The fund is currently managed by Michael Perre who has been in charge of the fund since August of 2008.
Performance
Investors naturally seek funds with strong performance. VEIEX has a 5-year annualized total return of 4.04% and is in the middle 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 -1.44%, 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 VEIEX over the past three years is 15.89% compared to the category average of 0%. The fund’s standard deviation over the past 5 years is 17.75% compared to the category average of 9%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.69, so investors should note that it is hypothetically less 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. The fund has produced a negative alpha over the past 5 years of -5.72, which shows that managers in this portfolio find it difficult to pick 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, VEIEX is a no load fund. It has an expense ratio of 0.29% compared to the category average of 96%. Looking at the fund from a cost perspective, VEIEX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on the Non US – Equity area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VEIEX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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