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There are plenty of choices in the Investment Grade Bond - Long category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Long-Term Investment-Grade Income Admiral (VWETX - Free Report) . VWETX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWETX is classified in the Investment Grade Bond - Long segment by Zacks, an area full of possibilities. Investment Grade Bond - Long funds focus on the long end of the curve, typically by investing in bonds that mature in more than 10 years. While fixed income instruments at this maturity level usually have high duration risk, they compensate investors with a larger yield than their short-maturity counterparts. These funds tend to be safer due to their focus on investment grade, but yields will be smaller than funds in the junk bond category.
History of Fund/Manager
VWETX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Long-Term Investment-Grade Income Admiral made its debut in February of 2001, VWETX has garnered more than $16.19 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 9.3%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.43%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VWETX's standard deviation over the past three years is 10.17% compared to the category average of 12.04%. Looking at the past 5 years, the fund's standard deviation is 8.9% compared to the category average of 10.45%. This makes the fund less volatile than its peers over the past half-decade.
VWETX carries a beta of 2.74, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.24, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWETX has 28.83% in high quality bonds rated at least 'AA' or higher, while 69.61% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VWETX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.83%. From a cost perspective, VWETX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $50,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Long-Term Investment-Grade Income Admiral ( VWETX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Long-Term Investment-Grade Income Admiral ( VWETX ) looks like a good potential choice for investors right now.
Your research on the Investment Grade Bond - Long segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is VWETX a Strong Bond Fund Right Now?
There are plenty of choices in the Investment Grade Bond - Long category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Long-Term Investment-Grade Income Admiral (VWETX - Free Report) . VWETX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VWETX is classified in the Investment Grade Bond - Long segment by Zacks, an area full of possibilities. Investment Grade Bond - Long funds focus on the long end of the curve, typically by investing in bonds that mature in more than 10 years. While fixed income instruments at this maturity level usually have high duration risk, they compensate investors with a larger yield than their short-maturity counterparts. These funds tend to be safer due to their focus on investment grade, but yields will be smaller than funds in the junk bond category.
History of Fund/Manager
VWETX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Long-Term Investment-Grade Income Admiral made its debut in February of 2001, VWETX has garnered more than $16.19 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 9.3%, and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.43%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VWETX's standard deviation over the past three years is 10.17% compared to the category average of 12.04%. Looking at the past 5 years, the fund's standard deviation is 8.9% compared to the category average of 10.45%. This makes the fund less volatile than its peers over the past half-decade.
VWETX carries a beta of 2.74, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.24, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWETX has 28.83% in high quality bonds rated at least 'AA' or higher, while 69.61% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VWETX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.83%. From a cost perspective, VWETX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $50,000; each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Long-Term Investment-Grade Income Admiral ( VWETX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Long-Term Investment-Grade Income Admiral ( VWETX ) looks like a good potential choice for investors right now.
Your research on the Investment Grade Bond - Long segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.