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Any investors hoping to find an Investment Grade Bond - Intermediate fund might consider looking past Vanguard Intermediate-Term Investment-Grade Admiral (VFIDX - Free Report) . VFIDX carries a Zacks Mutual Fund Rank of 4 (Sell), 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. Vanguard Intermediate-Term Investment-Grade Admiral made its debut in February of 2001, and since then, VFIDX has accumulated about $33.95 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 4.89%, and is in the middle 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 5.96%, 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 VFIDX over the past three years is 4.5% compared to the category average of 10.43%. Over the past 5 years, the standard deviation of the fund is 4.01% compared to the category average of 9%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.11, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIDX has a positive alpha of 0.53, 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 33.24% in high quality bonds rated at least 'AA' or higher, while 60.66% 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 0.81%. So, VFIDX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Investment Grade Bond - Intermediate funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VFIDX to its peers 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 VFIDX a Strong Bond Fund Right Now?
Any investors hoping to find an Investment Grade Bond - Intermediate fund might consider looking past Vanguard Intermediate-Term Investment-Grade Admiral (VFIDX - Free Report) . VFIDX carries a Zacks Mutual Fund Rank of 4 (Sell), 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. Vanguard Intermediate-Term Investment-Grade Admiral made its debut in February of 2001, and since then, VFIDX has accumulated about $33.95 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 4.89%, and is in the middle 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 5.96%, 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 VFIDX over the past three years is 4.5% compared to the category average of 10.43%. Over the past 5 years, the standard deviation of the fund is 4.01% compared to the category average of 9%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.11, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIDX has a positive alpha of 0.53, 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 33.24% in high quality bonds rated at least 'AA' or higher, while 60.66% 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 0.81%. So, VFIDX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Investment Grade Bond - Intermediate funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VFIDX to its peers 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.