VWUAX - Vanguard US Growth Adm

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Vanguard US Growth Adm (VWUAX)
Expense Ratio: 0.30%
Expected Lifetime Fees: $9,611.02

The Vanguard US Growth Adm fund (VWUAX) is a Large Growth fund started on 08/13/2001 and has $3.70 billion in assets under management. The current manager has been running Vanguard US Growth Adm since 10/29/2010. The fund is rated by Morningstar. This fund does not charge 12b-1 fees.

MarketRiders Prefers The Following ETF

Vanguard Growth ETF (VUG)
Expense Ratio: 0.10%
Expected Lifetime Fees: $3,271.86

The Vanguard Growth ETF (VUG) is an Exchange Traded Fund. It is a "basket" of securities that index the Large Growth investment strategy and is an alternative to a Large Growth mutual fund. Fees are very low compared to a comparable mutual fund like Vanguard US Growth Adm because computers automatically manage the stocks.

The Following Large Growth Funds Have Lower Fees Than Vanguard US Growth Adm (VWUAX). Why are these metrics important?
Mutual Fund Name Ticker Symbol Turnover Assets (M) Annual Fees
Calvert Social Index I CISIX 8.0% 131 0.21%
TIAA-CREF Large-Cap Gr Idx Instl TILIX 24.0% 908 0.08%
Vanguard FTSE Social Index Instl VFTNX 11.0% 535 0.16%
Vanguard FTSE Social Index Inv VFTSX 11.0% 535 0.29%
Vanguard Growth Index Instl VIGIX 23.0% 23,400 0.08%
Vanguard Growth Index Inv VIGRX 23.0% 23,400 0.24%
Vanguard Growth Index Signal VIGSX 23.0% 23,400 0.10%
Vanguard Russell 1000 Growth Index Fund Institutional Shares VRGWX 30.0% 507 0.08%

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Why Are These Metrics Important?

Turnover represents how much of a mutual fund's holdings are changed over the course of a year through buying and selling. Active mutual funds have an average turnover rate of about 85%, meaning that funds are turning over nearly all of their holdings every year. A high turnover means you could make lower returns because: 1) buying and selling stocks costs money through commissions and spreads and 2) the fund will distribute yearly capital gains which increases your taxes. Look for funds with turnover rates below 50%. For comparison, ETF turnover rates average around 10% or lower.

Generally, smaller funds do better than larger ones. The more assets in a mutual fund, the lower the chance that it will beat its index. Managers outperform an index by choosing stocks that are undervalued. In order to find these undervalued stocks, the manager has to know more than his competitors to develop an "edge." There are only a finite number of stocks a mutual fund manager can reasonably analyze and actively track to gain such a competitive edge. When the fund has more assets, the manager must analyze large companies because he needs to take larger positions. Large companies are more efficiently priced in the market and it becomes increasingly difficult to get an edge.