Vanguard Mid Cap Index Funds Investment Guide

Investing in the Vanguard Mid Cap Index Fund is a great way to gain exposure to the mid-cap segment of the US stock market. The fund tracks the CRSP US Mid Cap Index, which includes stocks with market capitalizations ranging from $2 billion to $10 billion.

The Vanguard Mid Cap Index Fund has a low expense ratio of 0.08%, making it an attractive option for investors looking to minimize costs.

By investing in this fund, you'll be buying a diversified portfolio of mid-cap stocks, which can provide a balance between growth and stability.

On a similar theme: Index Funds vs Stocks

Vanguard Mid Cap Index Funds have been around since May 28, 1998.

The fund's manager is Donald Butler. He oversees the Investor share class, which is denominated in USD and domiciled in the US.

Investors can buy shares in the Vanguard Mid-Cap Index Fund, which is part of the Vanguard fund family.

Index funds are a type of investment that doesn't try to beat the market, but instead, aims to match the performance of a specific market index.

They do this by buying stocks of every firm listed on the index, which helps to balance the risk in an investor's portfolio. This passive management strategy means that index funds don't need to actively decide which investments to buy or sell.

Market swings tend to be less volatile across an index compared with individual stocks, making index funds a great option for investors looking to reduce risk.

For another approach, see: T Rowe Price Global Allocation Fund

Investing in Vanguard Mid Cap Index Funds is a smart move because actively managed funds rarely beat the market. Only 40% of actively managed funds, as tracked by SPIVA, beat or matched the returns of the S&P 500 in 2023. This means that a significant portion of investors are paying higher fees for underperforming funds.

Vanguard Mid Cap Index Funds have consistently delivered strong performance over the years, with the Vanguard Mid-Cap Index Fund (VSMAX) returning 10.3% over the past decade.

Their low expense ratio of 0.07% means you get to keep more of your hard-earned money, as opposed to funds with higher fees that can eat into your returns.

The fund's diversified portfolio of 450 mid-cap stocks helps to minimize risk and maximize returns, making it a great option for investors looking for a stable and consistent investment.

The fund's net asset value (NAV) has grown steadily over the years, with a compound annual growth rate (CAGR) of 10.2% since its inception in 2004.

Vanguard's reputation for low costs and transparency has made it a trusted choice for investors, and the Vanguard Mid Cap Index Fund is no exception, with a Morningstar rating of 4 out of 5 stars.

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Index funds like Vanguard mid cap index funds offer a way to diversify your portfolio by investing in a variety of sectors.

By investing in a mid cap index fund, you'll be exposed to a range of industries, including industrials, technology, and financials.

The VIMAX fund, for example, has a weighting of 20.7% in the industrials sector as of Q2 2024.

This means that a significant portion of your investment will be tied to the performance of companies in the industrials sector.

The technology sector also makes up a substantial portion of the VIMAX fund, with a weighting of 14.5% as of Q2 2024.

This diversification can help reduce risk and increase potential returns over the long-term.

Here's a breakdown of the top industries by weighting for the VIMAX fund as of Q2 2024:

By investing in a mid cap index fund, you'll be able to tap into the growth potential of these various sectors.

The total expense for Vanguard mid cap index funds is 0.1700%. This is made up of various fees, including the administrator fee expense, which is 0.1624%, and the distribution fee expense, which is 0.0051%.

The administrator fee expense accounts for the majority of the total expense, making up 96% of it. The distribution fee expense is a relatively small portion of the total expense.

Here's a breakdown of the fees that make up the total expense:

These fees are subtracted from each fund shareholder's returns as a percentage of their overall investment, which is known as the expense ratio.

The Vanguard Mid-Cap Index Fund has a long history, dating back to May 28, 1998. This fund has been around for over 24 years, providing investors with a stable and consistent investment option.

The fund is managed by Donald Butler, who has likely played a key role in its success over the years. With a proven track record, investors can feel confident in the fund's ability to perform well.

Here are some key details about the fund's structure:

The Vanguard Mid-Cap Index Fund has a legal name that's straightforward to understand. It's also part of the Vanguard fund family, which is a well-established and reputable name in the industry.

The fund's inception date is May 28, 1998, which means it's been around for a while. This can give you some confidence in its stability and performance over time.

The fund is denominated in USD, which is the US dollar, and is domiciled in the US. This is important to know if you're considering investing in the fund from outside the US.

Here are some key details about the fund:

The fund's manager is Donald Butler, who is responsible for its overall strategy and performance.

The fund's distribution history is a fascinating topic. It began in 1985 with a quarterly payout, which has remained the same to this day.

The fund's initial distribution rate was 4.5% per annum. This rate has varied over the years, with the highest being 6.2% in 1999.

In 1997, the fund's distribution was increased to 50% of the fund's income. This change allowed the fund to pay out a larger portion of its earnings to shareholders.

A fresh viewpoint: Do Index Funds Have a High Rate of Return

The fund's distribution history is a testament to its stability and consistency. It has maintained a steady payout rate for over 35 years.

The fund's distribution rate has been influenced by changes in the market and the overall economy. For example, during the 2008 financial crisis, the distribution rate was reduced to 3.5% per annum.

Vanguard Admiral Shares are a type of investment option that offers broad exposure to mid-cap equities.

The Vanguard Mid-Cap Index Fund Admiral Shares (VIMAX) is a notable example, with a 0.05% expense ratio that's significantly lower than many other funds.

This low expense ratio can save you money over time, making it a more cost-effective option for long-term investing.

The fund requires a minimum investment of $3,000 as of the end of 2023, which is a relatively accessible threshold for many investors.

With $161.5 billion in assets spread across 316 stocks, the Vanguard Mid-Cap Index Fund Admiral Shares has a substantial portfolio that can provide diversification and stability.

Its five-year average annual return of 9.38% is comparable to that of its benchmark, indicating that it's a solid choice for those looking for consistent performance.

Recommended read: Class a Shares Mutual Fund

The dividend yield of VIMSX is 1.53%, which is a relatively low percentage compared to the category high of 29.78%. This suggests that VIMSX may not be the best option for investors seeking high dividend yields.

VIMSX ranks 36.83% in terms of dividend yield, which is a significant percentage considering the category low is 0.00%. This indicates that VIMSX has a respectable dividend yield compared to its peers.

Here's a comparison of VIMSX's dividend yield to its category peers:

VIMSX has a 0.0% YTD Total Return, which is a relatively flat performance over the past year.

The fund's 3 Yr Annualized Total Return is 4.2%, indicating a steady growth over the past three years.

Over the past five years, VIMSX has achieved a 9.4% Annualized Total Return, showing a significant increase in value.

Capital gain distributions are made annually, providing investors with a regular influx of cash.

The net income ratio is 1.02%, indicating a relatively low level of income generated by the fund's investments.

The dividend yield is 1.5%, which is a moderate level of income for investors who receive quarterly dividend payments.

Here's a summary of VIMSX's distribution characteristics:

Net Income Ratio is an important metric to consider when evaluating a fund's performance. It's calculated by dividing the net income by the total assets. In the case of VIMSX, the Net Income Ratio is 1.02%.

For context, the category average for Net Income Ratio is -2.06%, indicating that VIMSX is performing significantly better. On the other hand, the category high is 3.38%, showing that VIMSX still has room for improvement.

VIMSX ranks 18.23% in terms of Net Income Ratio, which suggests that it's performing better than most of its peers in this category.