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Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Index category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Total Bond Market Index Institutional (VBTIX - Free Report) . VBTIX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
VBTIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Total Bond Market Index Institutional debuted in September of 1995. Since then, VBTIX has accumulated assets of about $40.29 billion, according to the most recently available information. The fund's current manager, Joshua C. Barrickman, 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 1.97%, and is in the bottom 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 1.3%, which places it in the bottom 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, VBTIX's standard deviation comes in at 2.86%, compared to the category average of 8.3%. Looking at the past 5 years, the fund's standard deviation is 2.87% compared to the category average of 8.65%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. VBTIX gained 6.28% in the most recent bear market and outperformed its peer group by 52.42%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.04, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.11. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VBTIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.74%. VBTIX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $5 million and that each subsequent investment needs to be at $1.
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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Index category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Total Bond Market Index Institutional (VBTIX - Free Report) . VBTIX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
VBTIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Total Bond Market Index Institutional debuted in September of 1995. Since then, VBTIX has accumulated assets of about $40.29 billion, according to the most recently available information. The fund's current manager, Joshua C. Barrickman, 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 1.97%, and is in the bottom 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 1.3%, which places it in the bottom 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, VBTIX's standard deviation comes in at 2.86%, compared to the category average of 8.3%. Looking at the past 5 years, the fund's standard deviation is 2.87% compared to the category average of 8.65%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. VBTIX gained 6.28% in the most recent bear market and outperformed its peer group by 52.42%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.04, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.11. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VBTIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.74%. VBTIX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $5 million and that each subsequent investment needs to be at $1.
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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.