Are you on the hunt for a Non US - Equity fund? You should think about starting with 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
VEIEX 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 responsible for VEIEX, and the company is based out of Malvern, PA. Vanguard Emerging Markets Stock Index Investor debuted in May of 1994. Since then, VEIEX has accumulated assets of about $240.72 million, according to the most recently available information. Michael Perre is the fund's current manager and has held that role since August of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VEIEX has a 5-year annualized total return of 1.54% 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 7%, 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. VEIEX's standard deviation over the past three years is 13.14% compared to the category average of 10.12%. Over the past 5 years, the standard deviation of the fund is 15.36% compared to the category average of 10.41%. 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. VEIEX lost 62.7% in the most recent bear market and underperformed its peer group by 4%. This might suggest that the fund is a worse choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 0.86, 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. With a negative alpha of -7.12, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key 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 1.20%. From a cost perspective, VEIEX is actually cheaper than its peers.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds 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.
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