Vanguard 500 Index Admiral (VFIAX) (2024)

Vanguard 500 Index Admiral Overview

Vanguard 500 Index Admiral (VFIAX) is a passively managed U.S. Equity Large Blend fund. Vanguard launched the fund in 2000.

The investment seeks to track the performance of the Standard & Poor‘s 500 Index that measures the investment return of large-capitalization stocks. The fund employs an indexing investment approach designed to track the performance of the Standard & Poor's 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. The advisor attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The fund is non-diversified.

About Vanguard 500 Index Admiral (VFIAX)

There are 3 members of the management team with an average tenure of 2.97 years: Michelle Louie (2017), Nick Birkett (2023), Aaron Choi (2023). Management tenure is more important for actively managed funds than passive index funds.

The fund has 1 primary benchmark: S&P 500 TR USD index with a weighting of 100%. Vanguard 500 Index Admiral has 507 securities in its portfolio. The top 10 holdings constitute 34.3% of the fund’s assets. The fund meets the SEC requirement of being classified as a nondiversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

Vanguard 500 Index Admiral is part of the Equity global asset class and is within the U.S. Equity fund group. Vanguard 500 Index Admiral has 0.6% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 99.3%. There is 0.6% allocated to foreign stock, and 0.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 0.0% (0.0% domestic bond, 0.0% foreign bond and 0.0% convertible bond). Vanguard 500 Index Admiral has 0.1% of the portfolio in cash.

Assets Under Management

The fund has $530 billion in total assets, which is above the $4 billion average for the Large Blend category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

Vanguard 500 Index Admiral has a trailing dividend yield of 1.27%, which is above the 0.80% category average. The fund normally distributes its dividend income quarterly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

VFIAX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Vanguard 500 Index Admiral expense ratio is low compared to funds in the Large Blend category. Vanguard 500 Index Admiral has an expense ratio of 0.04%, which is 95% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Vanguard 500 Index Admiral has a portfolio turnover rate of 2%, indicating that holds its assets around 0.5 years. By way of comparison, the average portfolio turnover is 44% for the Large Blend category.

Recently, in the month of August 2024, Vanguard 500 Index Admiral returned 2.4%, which earned it a grade of B, as the Large Blend category had an average return of 2.2%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

Vanguard 500 Index Admiral Grades

Year to date, the fund has returned 19.5%, 1.8 percentage points better than the category, which translates into a grade of B. The fund has returned 27.1% over the past year (grade of B), 9.3% over the past three years (grade of B) and 15.9% per year over the past five years (grade of A) and 12.9% per year over the past 10 years (grade of A).