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Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding an Index fund? Vanguard Total Bond Market Index Institutional (VBTIX - Free Report) is a potential starting point. VBTIX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Vanguard Group is responsible for VBTIX, and the company is based out of Malvern, PA. Vanguard Total Bond Market Index Institutional made its debut in September of 1995, and since then, VBTIX has accumulated about $52.69 billion in assets, per the most up-to-date date available. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.36%, 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 5.51%, which places it in the middle 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 VBTIX over the past three years is 3.48% compared to the category average of 14.41%. Over the past 5 years, the standard deviation of the fund is 3.28% compared to the category average of 12.41%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that 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 -0.1. 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 0.81%. From a cost perspective, VBTIX is actually cheaper than its peers.
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
Overall, Vanguard Total Bond Market Index Institutional ( VBTIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, Vanguard Total Bond Market Index Institutional ( VBTIX ) looks like a great potential choice for investors right now.
For additional information on the Index 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 VBTIX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is Vanguard Total Bond Market Index Institutional (VBTIX) a Strong Mutual Fund Pick Right Now?
Having trouble finding an Index fund? Vanguard Total Bond Market Index Institutional (VBTIX - Free Report) is a potential starting point. VBTIX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Vanguard Group is responsible for VBTIX, and the company is based out of Malvern, PA. Vanguard Total Bond Market Index Institutional made its debut in September of 1995, and since then, VBTIX has accumulated about $52.69 billion in assets, per the most up-to-date date available. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since February of 2013.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.36%, 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 5.51%, which places it in the middle 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 VBTIX over the past three years is 3.48% compared to the category average of 14.41%. Over the past 5 years, the standard deviation of the fund is 3.28% compared to the category average of 12.41%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.04, so investors should note that 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 -0.1. 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 0.81%. From a cost perspective, VBTIX is actually cheaper than its peers.
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
Overall, Vanguard Total Bond Market Index Institutional ( VBTIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, Vanguard Total Bond Market Index Institutional ( VBTIX ) looks like a great potential choice for investors right now.
For additional information on the Index 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 VBTIX too for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.