Vanguard Mid-Cap Index Fund (VIMSX)

US Stock fund can be categorized into three main categories such as Large Cap US Stock fund, Mid Cap US stock fund, and Small Cap US stock fund. These funds invest according to its naming. Large Cap stock fund will invest in large US Companies stocks and so on. Vanguard has been the leader of US stock index fund. One of these US stock index funds is Vanguard Mid Cap Index Fund. This fund invests mainly in companies with mid-capitalization.

Vanguard Mid-Cap Index Fund Investor Shares (VIMSX)

The investment objective of Vanguard Mid Cap Index Fund is to track the performance of the MSCI US Mid Cap 450 Index, a benchmark index. This index measures the investment return of mid-capitalization stocks. The fund employs a passive management or indexing investment approach. This US Stock Index Fund will try to replicate the target index by investing all or most of its assets in the stocks that make up the index based on its index weighting.

Fund Details

Vanguard Mid Cap Index fund

• Fund Inception Date: 05/1/1998
• Ticker Symbol: VIMSX
• CUSIP: 922908843
• Beta (3yr): 1.11
• Rank in category (2011): 34%
• Category: Mid-Cap Blend
• Distribution Rate: 1.18%
• Capital Gains: 0%
• Expense Ratio: 0.26%  
• Net Assets: $ 25.99 billion
• Number of Years Up: 9 years
• Number of Years Down: 4 years
• Annual Turnover Rate: 16.00%

updated on 1/20/2012

The current lead manager of this index fund is Donald M. Butler. He has been managing this Vanguard fund since the inception date. This fund has annual expense ratio of 0.26%. This figure is much lower compared to the average in Mid-Cap Blend category which is 1.27%. For volatility measurement, this fund uses the following benchmarks such as Spliced Mid Cap Index and Dow jones U.S. Total Stock Market Index.

As part of top rated domestic stock fund, Morningstar has given this fund 4-star rating for its performance. It is also rated as Gold Rating by the Morningstar Analyst. This fund has recorded 9 years in positive return and 4 years in negative return. Based on the load adjusted return, this fund has returned 19.86% over the past 3 years and 1.21% over the past 5-years. The best 1-year total return of this top equity fund was in 2009 with 40.22%. The worst 1-year total return was in 2008 with -41.82%. The performance of this fund for last these years is as below:

• Year 2010: 25.46%
• Year 2009: 40.22%
• Year 2008: -41.82%

Investors who would like to invest in this fund can open a brokerage or IRA account with a minimum initial investment of $3,000 and minimum subsequent investment of $100. This VIMSX fund is a no load fund. Therefore there is no 12b1 fee and no front-end sales load fee. This best US stock fund is available for purchase from 87 brokerages. They are Vanguard, JP Morgan, T Rowe Price, Federated Trust Connect, Schwab Retail, Ameriprise Brokerage, Fidelity Retail Funds Network, Raymond James, Firstrade, etc. The other class beside this Investor Shares is Admiral Shares (VIMAX).

Fund Composition

The top 10 largest holdings of this best stock fund as of December 2011 are Humana inc, Alexion Pharmaceuticals Inc, FMC Technologies Inc, SanDisk Corp, Avalon Bay Communities Inc, Fastenal Co, Range Resources Corp, WW Grainer Inc, Motorola Mobility Holdings Inc and Ltd Brand Inc. These top 10 holdings represent 5.4% of total net assets. The top equity sector diversification is Consumer Discretionary (17.50%), Financials (16.20%), Information Technology (14.90%), Industrials (11.70%) and Health Care (10.40%).

Primary risks of investing in this index fund are stock market risk, investment style risk, mid cap risk, etc.

Pros:

• Low cost index fund
• Rated with gold rating by Morningstar Analysts

Cons:

• none

Disclosure: No Position

Other US Stock Funds:

• Akre Focus Fund (AKREX)
• Scout Mid Cap Review (UMBMX)