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Is Vanguard Total Bond Market Index Investor (VBMFX) a Strong Mutual Fund Pick Right Now?
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Any investors who are searching for Index funds should take a look at Vanguard Total Bond Market Index Investor (VBMFX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
VBMFX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Total Bond Market Index Investor made its debut in December of 1986 and VBMFX has managed to accumulate roughly $1.41 billion in assets, as of the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VBMFX has a 5-year annualized total return of 2.83% and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.3%, which places it in the middle 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. Over the past three years, VBMFX's standard deviation comes in at 3.62%, compared to the category average of 12.71%. Over the past 5 years, the standard deviation of the fund is 3.4% compared to the category average of 10.57%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VBMFX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -0.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VBMFX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.79%. So, VBMFX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Your research on the Index 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is Vanguard Total Bond Market Index Investor (VBMFX) a Strong Mutual Fund Pick Right Now?
Any investors who are searching for Index funds should take a look at Vanguard Total Bond Market Index Investor (VBMFX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
VBMFX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard Total Bond Market Index Investor made its debut in December of 1986 and VBMFX has managed to accumulate roughly $1.41 billion in assets, as of the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VBMFX has a 5-year annualized total return of 2.83% and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.3%, which places it in the middle 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. Over the past three years, VBMFX's standard deviation comes in at 3.62%, compared to the category average of 12.71%. Over the past 5 years, the standard deviation of the fund is 3.4% compared to the category average of 10.57%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VBMFX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -0.18, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VBMFX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.79%. So, VBMFX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Your research on the Index 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.