Fund Evaluator:
Vanguard Market Neutral I (VMNIX)
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Best Performing in Equity Market Neutral Over the Last Year
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Fund Details
Vanguard Market Neutral I Overview
Vanguard Market Neutral I (VMNIX) is an actively managed Alternative Equity Market Neutral fund. Vanguard launched the fund in 1998.
The investment seeks to provide long-term capital appreciation while limiting exposure to general stock market risk. The fund employs an active management approach, following a market neutral strategy, which the managers define as a strategy designed to produce a portfolio that is neutral with respect to general stock market risk (sometimes referred to as beta neutrality). Beta is a measure of a portfolio's volatility relative to the volatility of the general stock market. The fund, as a whole, does not seek to adhere to any other definition of market neutrality.
About Vanguard Market Neutral I (VMNIX)
There are 1 members of the management team with an average tenure of 5.43 years: Cesar Orosco (2021). Management tenure is more important for actively managed funds than passive index funds.
The fund has 2 primary benchmarks: DJ US Total Stock Market TR USD index with a weighting of 100% and FTSE Treasury Bill 3 Mon USD index with a weighting of 100%. Vanguard Market Neutral I has 598 securities in its portfolio. The top 10 holdings constitute 8.1% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.
Vanguard Market Neutral I is part of the Alternative Strategies global asset class and is within the Alternative fund group. Vanguard Market Neutral I has -1.4% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 1.1%. There is -1.4% 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 Market Neutral I has 100.3% of the portfolio in cash.
Assets Under Management
The fund has $106 million in total assets, which is below the $635 million average for the Equity Market Neutral 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.
VMNIX 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 Market Neutral I expense ratio is high compared to funds in the Equity Market Neutral category. Vanguard Market Neutral I has an expense ratio of 1.89%, which is 5% lower than its category average, making the fund expense ratio grade a C. 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 Market Neutral I has a portfolio turnover rate of 108%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 144% for the Equity Market Neutral category.
Recently, in the month of July 2026, Vanguard Market Neutral I returned 1.5%, which earned it a grade of D, as the Equity Market Neutral category had an average return of 2.1%. 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 Market Neutral I has a trailing yield of 3.07%, which is above the 2.52% category average. The fund normally distributes its income none and its capital gains semi-monthly.
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.
Vanguard Market Neutral I Grades
Year to date, the fund has returned 16.2%, 11.5 percentage points better than the category, which translates into a grade of A. The fund has returned 24.9% over the past year (grade of A), 14.3% over the past three years (grade of B) and 14.1% per year over the past five years (grade of A) and 5.4% per year over the past 10 years (grade of B).
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VMNIX Trailing NAV Total Returns Data as of 7/31/26
| Last Month |
Last Quarter |
Ann'l. 1Yr |
Ann'l. 3Yr |
Ann'l. 5Yr |
Ann'l. 10Yr |
|
| VMNIX Return (NAV) | 1.5% | 5.9% | 24.9% | 14.3% | 14.1% | 5.4% |
| VMNIX Grade | D | A | A | B | A | B |
| +/- Category | -0.6% | 2.8% | 15.0% | 4.0% | 5.9% | 0.5% |
| Equity Market Neutral Avg | 2.1% | 3.1% | 10.0% | 10.3% | 8.2% | 5.0% |
| VMNIX Tax Cost Ratio | na | na | 1.2% | 1.7% | 1.1% | 0.7% |
VMNIX Annual NAV Total ReturnsData as of 7/31/26
| 2026 | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
| VMNIX Return (NAV) | 16.2% | 9.3% | 5.9% | 12.3% | 13.5% | 23.4% | -11.6% | -9.5% | 0.7% | -4.8% | 2.7% |
| VMNIX Grade | A | C | C | B | A | A | F | F | D | F | C |
| +/- Category | 11.5% | -1.2% | -3.9% | 4.0% | 9.0% | 16.5% | -10.0% | -11.2% | 1.1% | -10.5% | 2.1% |
| Equity Market Neutral Avg | 4.6% | 10.5% | 9.8% | 8.3% | 4.5% | 6.9% | -1.6% | 1.7% | -0.4% | 5.7% | 0.6% |
| Risk Measures | |
| Standard Deviation: | 6.2% |
| Total Risk Index: | 0.50 - Below Average |
| Category Risk Index: | 1.12 - Above Average |
| Category Risk Grade: | D (78% Rank) |
| Beta: | -0.02 |
| R-Squared: | 0% |
| Leveraged Fund: | No |
| Inverse Fund: | No |
| Portfolio Characteristics | |
| Equity Investment Style: | Small-Cap Value |
| Bond Investment Style: | na |
| Yield: | 3.1% |
| Dividend Distribution: | None |
| Cap Gains Distribution: | Semi-Monthly |
| Total Assets: | $601 Mil |
| Fund Total Assets: | $ 107 Mil |
| Share Class Type: | Inst |
| Portfolio Turnover: | 108% |
Management Team
| Number of Managers: 1 | |||
| Longest Tenure: 5.4 years | |||
| Average Tenure: 5.4 years | |||
| Managers (Year): Orosco Cesar (2021) | |||
Portfolio Composition (as of 3/31/26)
| # of Holdings: | 598 |
| % in Top 10 Holdings: | 8.1% |
| Fund is Non-Diversified: | No |
| % in Foreign Issues: | -1.4% |
Portfolio Allocation |
|
| Domestic Stock: | 1.1% |
| Foreign Stock: | -1.4% |
| Preferred Stock: | 0.0% |
| Domestic Bond: | 0.0% |
| Foreign Bond: | 0.0% |
| Convertible Bond: | 0.0% |
| Other: | 0.0% |
| Cash: | 100.3% |
Purchase Information
| Fund Family: | Vanguard |
| Phone Number: | 800-662-2739 |
| Website: | www.vanguard.com |
| Status: | Open |
| Inception Date: | October 19, 1998 |
| Min. Initial Purchase: | $5,000,000 |
| Min. Initial IRA Purchase: | $ 0 |
| True No-Load: | Yes |
| Front Load Maximum: | 0.00% |
| Deferred Charge Maximum: | 0.00% |
| Redemption Charge Maximum: | 0.00% |
| 12b-1 Fee: | na |
Expenses and Fees | |
| Expense Ratio (%): | 1.89% ( Rating : High ) |
| Category Average Expense Ratio (%): | 1.99% |
| Share Class: | Vanguard Market Neutral I |
| Min. Subsequent Purchase: | $ 1 |
| Min. Subsequent IRA Purchase: | $ 0 |
