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Have you been searching for a Government - Bonds: Misc fund? You might want to begin with Vanguard Inflation Pro Security Fund (VIPSX - Free Report) . VIPSX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VIPSX in the Government - Bonds: Misc category, an area rife with potential choices. Government - Bonds: Misc funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category stretches across the curve, so the yields and interest rate sensitivity will vary, though a mixed approach generally results in a medium yield and risk profile.
History of Fund/Manager
VIPSX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Inflation Pro Security Fund made its debut in June of 2000, VIPSX has garnered more than $3.62 billion in assets. The fund's current manager, Gemma Wright Casparius, has been in charge of the fund since August of 2011.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 1.08%, and it sits in the top 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 1.38%, 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. The standard deviation of VIPSX over the past three years is 3.26% compared to the category average of 6.69%. The fund's standard deviation over the past 5 years is 3.71% compared to the category average of 6.88%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For those that believe interest rates will rise, this is an important factor to consider. VIPSX has a modified duration of 7.6, which suggests that the fund will decline 7.6% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 0.7% means that a $10,000 investment should result in a yearly payout of $70.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 1.02, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VIPSX has a negative alpha of -1.09, which measures performance on a risk-adjusted basis.
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, VIPSX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.80%. From a cost perspective, VIPSX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Inflation Pro Security Fund ( VIPSX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on the Government - Bonds: Misc area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VIPSX too 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 VIPSX a Strong Bond Fund Right Now?
Have you been searching for a Government - Bonds: Misc fund? You might want to begin with Vanguard Inflation Pro Security Fund (VIPSX - Free Report) . VIPSX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VIPSX in the Government - Bonds: Misc category, an area rife with potential choices. Government - Bonds: Misc funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category stretches across the curve, so the yields and interest rate sensitivity will vary, though a mixed approach generally results in a medium yield and risk profile.
History of Fund/Manager
VIPSX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Inflation Pro Security Fund made its debut in June of 2000, VIPSX has garnered more than $3.62 billion in assets. The fund's current manager, Gemma Wright Casparius, has been in charge of the fund since August of 2011.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 1.08%, and it sits in the top 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 1.38%, 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. The standard deviation of VIPSX over the past three years is 3.26% compared to the category average of 6.69%. The fund's standard deviation over the past 5 years is 3.71% compared to the category average of 6.88%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For those that believe interest rates will rise, this is an important factor to consider. VIPSX has a modified duration of 7.6, which suggests that the fund will decline 7.6% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 0.7% means that a $10,000 investment should result in a yearly payout of $70.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 1.02, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VIPSX has a negative alpha of -1.09, which measures performance on a risk-adjusted basis.
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, VIPSX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.80%. From a cost perspective, VIPSX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Inflation Pro Security Fund ( VIPSX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on the Government - Bonds: Misc area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VIPSX too 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.