Vanguard Capital OpportunityVHCOX

Morningstar Rating

Fund Research and Analysis

by David Kathman, CFA

Vanguard Capital Opportunity is a standout, but it needs to be used appropriately.

This fund has been subadvised for the past decade by the Primecap management team, and is now one of four funds managed by that team that are Analyst Picks in the large-growth category. Read more

Kudos

The management team is topnotch.

Fantastic long-term record.

Low expense ratio relative to the category. Read more

Risks

Outsized sector weightings, especially in technology, can cause turbulence at times.

Although the fund is closed, its increasing size has forced management to ratchet up its allocation to large- and mega-cap companies over the years. Read more

Strategy

The fund's managers follow a contrarian-growth approach. They look for swiftly growing firms but like to buy their stocks on the cheap when they're out of favor. The fund often has outsized sector weightings because many of the managers' favorites are clustered in a few industries. Read more

Management

The fund's five managers--Howard Schow, Theo Kolokotrones, Joel Fried, Al Mordecai, and Dave Van Slooten--employ an unusual team structure. Although they share ideas, each independently manages a portion of the fund's assets. Their strong record at Vanguard Primecap speaks for itself. Read more

Inside Scoop

The team that manages this fund also runs Vanguard Primecap. At both funds, management has thrived by purchasing beaten-down stocks in growth industries. Read more

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