Performance Breakdown of the Vanguard Pacific Stock Index Fund (VPACX)



Returns of the Vanguard Pacific Stock Index Fund (VPACX)

From a purely NAV (net asset value) return standpoint, in the one year period ending January 2016, VPACX came in fourth place among the nine funds chosen for this review. Although the VPACX is benchmarked to the FTSE Developed Asia Pacific All Cap Index, we’ll look use the MSCI AC Asia-Pacific Index as our benchmark in order to maintain parity of comparison with the other funds in this review.

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Standard deviation

Standard deviation is used for assessing risks associated with an investment. Simply put, it measures the deviation of a series of returns from its average. A wide deviation reflects high fluctuation in returns, resulting in higher risk, and vice-versa.

For the one-year period ending January 2016, the standard deviation for VPACX stood at 16.7%. The MSCI AC Asia-Pacific Index had a standard deviation of 16.1% over the same period while the arithmetic average of the standard deviation of all funds in this review came in at 15.3%. Hence, the returns of VPACX were more volatile than both the peer group average and the index.

The Sharpe Ratio

For realized returns, the Sharpe Ratio assesses the average return of a risk-free asset or security (like US Treasuries of a certain maturity) over its total risk, as represented by its standard deviation. The higher the Sharpe Ratio, the better the risk-adjusted performance.

The Sharpe Ratio for VPACX for the one-year period ending January 2016 stood at -0.35. This risk-adjusted measure stood at -0.62 for the index, which shows a strong risk-adjusted performance. That said, the beta of the fund stood at 1.01, making it as much susceptible to volatility as the MSCI AC Asia-Pacific Index.

A note for investors

VPACX invests in Tokio Marine Holdings (TKOMY), Nissan Motor Company (NSANY), Mitsui & Company (MITSY), Nomura Holdings (NMR), and FUJIFILM Holdings (FUJIY)—among a host of other stocks—represents the performance of the underlying index, against which we can compare the actively managed funds in this review. For investors who want to invest in the region but are wary of emerging and frontier markets, this fund could be your instrument of choice.

And now for the last fund in our review: the Wells Fargo Asia Pacific Fund Class A (WFAAX).


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