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Having trouble finding a Large Cap Growth fund? Vanguard PRIMECAP Fund Administrative (VPMAX) is a possible starting point. VPMAX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VPMAX 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 based in Malvern, PA, and is the manager of VPMAX. Vanguard PRIMECAP Fund Administrative made its debut in November of 2001, and since then, VPMAX has accumulated about $62.13 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 16.36%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 17.09%, which places it in the middle 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. The standard deviation of VPMAX over the past three years is 11.82% compared to the category average of 10.29%. The standard deviation of the fund over the past 5 years is 11.06% compared to the category average of 9.91%. 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 VPMAX's case, the fund lost 44.26% in the most recent bear market and underperformed comparable funds by 4.71%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.05, 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. Over the past 5 years, the fund has a positive alpha of 1.09. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.