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Vanguard Capital Opportunity Dusts Peers

Most of Vanguard Capital Opportunity Fund's rivals would need binoculars to see it.

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Vanguard Capital Opportunity Fund (VHCOX) is smoking its peers (again).

For the year to date through March 8, 2001, the fund has eked out a slight gain. That may not sound like much, but it's quite an accomplishment: The fund's average mid-cap growth rival lost 12% during that period. A number of factors helped the fund outpace the group. For one, the fund had a smaller weight in the struggling tech sector than most of its rivals. Moreover, within tech, the fund had relatively little exposure to the Internet-infrastructure stocks that have been hit especially hard so far in 2001. Management made a foray into the beaten-down retail sector in 2000's fourth quarter, and some of its picks, including Tommy Hilfiger (TOM), have rallied sharply off their lows. And unlike many of its category peers, the fund lacks a huge weighting in biotech stocks, which have crumbled this year.

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Scott Cooley does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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