We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Have you been searching for an Index fund? You might want to begin with 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
Vanguard Group is based in Malvern, PA, and is the manager of VBTIX. Since Vanguard Total Bond Market Index Institutional made its debut in September of 1995, VBTIX has garnered more than $47.55 billion in assets. Joshua C. Barrickman is the fund's current manager and has held that role since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.06%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.15%, 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. Compared to the category average of 6.27%, the standard deviation of VBTIX over the past three years is 2.9%. Looking at the past 5 years, the fund's standard deviation is 3.17% compared to the category average of -43.27%. This makes the fund more 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. In the most recent bear market, VBTIX gained 6.27% and underperformed comparable funds by 2978%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VBTIX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. 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. With a negative alpha of -0.11, 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, VBTIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.64%. VBTIX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $5 million; each subsequent investment needs to be at least $1.
Bottom Line
Want even more information about VBTIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
Have you been searching for an Index fund? You might want to begin with 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
Vanguard Group is based in Malvern, PA, and is the manager of VBTIX. Since Vanguard Total Bond Market Index Institutional made its debut in September of 1995, VBTIX has garnered more than $47.55 billion in assets. Joshua C. Barrickman is the fund's current manager and has held that role since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.06%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.15%, 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. Compared to the category average of 6.27%, the standard deviation of VBTIX over the past three years is 2.9%. Looking at the past 5 years, the fund's standard deviation is 3.17% compared to the category average of -43.27%. This makes the fund more 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. In the most recent bear market, VBTIX gained 6.27% and underperformed comparable funds by 2978%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. VBTIX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. 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. With a negative alpha of -0.11, 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, VBTIX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.64%. VBTIX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $5 million; each subsequent investment needs to be at least $1.
Bottom Line
Want even more information about VBTIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.