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Is Vanguard Total Bond Market Index Investor (VBMFX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Index funds, consider Vanguard Total Bond Market Index Investor (VBMFX - Free Report) as a possibility. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBMFX. Since Vanguard Total Bond Market Index Investor made its debut in December of 1986, VBMFX has garnered more than $599.36 million in assets. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 0.24%, and is in the middle 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 -2.58%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. VBMFX's standard deviation over the past three years is 7.13% compared to the category average of 12.8%. The fund's standard deviation over the past 5 years is 6.14% compared to the category average of 13.4%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1, so investors should note that it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.12. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VBMFX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.87%. So, VBMFX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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?
If you've been stuck searching for Index funds, consider Vanguard Total Bond Market Index Investor (VBMFX - Free Report) as a possibility. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBMFX. Since Vanguard Total Bond Market Index Investor made its debut in December of 1986, VBMFX has garnered more than $599.36 million in assets. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 0.24%, and is in the middle 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 -2.58%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. VBMFX's standard deviation over the past three years is 7.13% compared to the category average of 12.8%. The fund's standard deviation over the past 5 years is 6.14% compared to the category average of 13.4%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1, so investors should note that it is hypothetically as volatile as the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.12. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VBMFX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.87%. So, VBMFX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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.