There are plenty of choices in the Non US – Equity category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Emerging Markets Select Stock Investor (VMMSX). VMMSX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
VMMSX 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 VMMSX, and the company is based out of Malvern, PA. The Vanguard Emerging Markets Select Stock Investor made its debut in June of 2011 and VMMSX has managed to accumulate roughly $760.18 million in assets, as of the most recently available information. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 11.26%, and is 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 5.27%, 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. VMMSX’s standard deviation over the past three years is 21.81% compared to the category average of 19.7%. The standard deviation of the fund over the past 5 years is 18.92% compared to the category average of 17.4%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. VMMSX has a 5-year beta of 0.97, which means it is likely to be as volatile as the market average. 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. VMMSX’s 5-year performance has produced a negative alpha of -1.33, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VMMSX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 1.20%. VMMSX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Overall, Vanguard Emerging Markets Select Stock Investor ( VMMSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Emerging Markets Select Stock Investor ( VMMSX ) looks like a good potential choice for investors right now.
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