VEXAX, or the Vanguard Extended Market Index Fund, focuses on small- and mid-cap stocks, which are often more volatile but can offer higher growth potential compared to large-cap stocks.
With an inception date of December 27, 2001, VEXAX has been tracking market performance for over two decades, making it a well-established option for investors.
The fund's low expense ratio of 0.06% means that a smaller percentage of your investment goes toward fees, allowing for potentially higher net returns over time.
As of the latest data, VEXAX has a yield of 1.28%, indicating that it distributes a portion of its earnings to shareholders, which can be an attractive feature for income-focused investors.
VEXAX invests in over 1,000 holdings, providing diversification that can mitigate risks associated with individual stock performance.
The fund's last dividend payout was $0.77, which provides a tangible return to investors and contributes to total return along with capital gains.
The Morningstar rating of 2 out of 5 suggests that while VEXAX is a solid option, there are funds rated higher that might be considered better investments based on their performance and risk metrics.
VEXAX's primary investment strategy is indexing, which means it aims to replicate the performance of the S&P Completion Index, focused on companies not included in the S&P 500.
Mid-cap stocks, like those in which VEXAX invests, can be attractive because they often have greater growth potential compared to established large-cap firms, while typically being less risky than small-cap stocks.
Behavioral finance studies suggest that individual investors often underweight mid-cap stocks due to a lack of familiarity, potentially leading to investment opportunities in funds like VEXAX.
The fund is categorized under the mid-cap blend sector, which means it includes a mix of value and growth stocks, appealing to a broad range of investment strategies.
Net assets of approximately $99.83 billion indicate a significant level of trust among investors, as larger funds often benefit from economies of scale and lower trading costs.
VEXAX's performance can be influenced by economic cycles; small and mid-cap stocks often outperform during economic expansions and may underperform during recessions.
The fund has moderate risk levels, suggesting that while it provides exposure to growth stocks, investors should be prepared for fluctuations in value based on market conditions.
Recent trends in the market show that small-cap stocks, like those in VEXAX, have recently garnered attention due to their potential recovery as the economy normalizes post-pandemic.
Research indicates that small-cap stocks can outperform large-caps over long horizons, but their volatility may lead to short-term losses, underscoring the importance of a long-term investment horizon.
Investors often use dollar-cost averaging when investing in funds like VEXAX, which can reduce the impact of volatility by spreading out purchases over time.
VEXAX's indexing strategy can provide tax efficiency compared to actively managed funds because of lower capital gains distributions.
Investors need to consider their risk tolerance with VEXAX, as mid-cap stocks can experience substantial swings, impacting the overall portfolio value.
The fund's performance also reflects broader market trends; during periods of economic recovery, investors typically favor riskier assets, contributing to small-cap growth which VEXAX captures.