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There are plenty of choices in the Investment Grade Bond - Intermediate category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Intermediate-Term Investment-Grade Admiral (VFIDX - Free Report) . VFIDX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VFIDX in the Investment Grade Bond - Intermediate category, an area rife with potential choices. Investment Grade Bond - Intermediate funds target the middle part of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. At these maturity levels, fixed income instruments have medium duration risk--but they compensate investors with a respectable yield compared to shorter maturity options. Finally, a focus on investment grade ensures that these funds are safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFIDX. Since Vanguard Intermediate-Term Investment-Grade Admiral made its debut in February of 2001, VFIDX has garnered more than $29.16 billion in assets. The fund's current manager, Samuel C. Martinez, has been in charge of the fund since April of 2018.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 3.86%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.9%, 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. Compared to the category average of 9.31%, the standard deviation of VFIDX over the past three years is 4.26%. Over the past 5 years, the standard deviation of the fund is 3.9% compared to the category average of 8.48%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.13, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIDX has a negative alpha of -0.17, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VFIDX has 34.48% in high quality bonds rated at least 'AA' or higher, while 63.67% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, VFIDX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.82%. Looking at the fund from a cost perspective, VFIDX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $50,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate 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 VFIDX 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 VFIDX a Strong Bond Fund Right Now?
There are plenty of choices in the Investment Grade Bond - Intermediate category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Intermediate-Term Investment-Grade Admiral (VFIDX - Free Report) . VFIDX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VFIDX in the Investment Grade Bond - Intermediate category, an area rife with potential choices. Investment Grade Bond - Intermediate funds target the middle part of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. At these maturity levels, fixed income instruments have medium duration risk--but they compensate investors with a respectable yield compared to shorter maturity options. Finally, a focus on investment grade ensures that these funds are safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFIDX. Since Vanguard Intermediate-Term Investment-Grade Admiral made its debut in February of 2001, VFIDX has garnered more than $29.16 billion in assets. The fund's current manager, Samuel C. Martinez, has been in charge of the fund since April of 2018.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 3.86%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.9%, 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. Compared to the category average of 9.31%, the standard deviation of VFIDX over the past three years is 4.26%. Over the past 5 years, the standard deviation of the fund is 3.9% compared to the category average of 8.48%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.13, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIDX has a negative alpha of -0.17, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VFIDX has 34.48% in high quality bonds rated at least 'AA' or higher, while 63.67% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, VFIDX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.82%. Looking at the fund from a cost perspective, VFIDX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $50,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate 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 VFIDX 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.