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Is VAIPX a Strong Bond Fund Right Now?

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Government - Bonds: Misc fund seekers may want to consider taking a look at Vanguard Inflation Pro Security Admiral (VAIPX - Free Report) . VAIPX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify VAIPX 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

Vanguard Group is based in Malvern, PA, and is the manager of VAIPX. Since Vanguard Inflation Pro Security Admiral made its debut in June of 2005, VAIPX has garnered more than $19.54 billion in assets. The fund's current manager, Gemma Wright Casparius, has been in charge of the fund since August of 2011.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. VAIPX has a 5-year annualized total return of 4.32% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 6.39%, 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 VAIPX over the past three years is 3.76% compared to the category average of 11.5%. Over the past 5 years, the standard deviation of the fund is 3.54% compared to the category average of 9.63%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.88, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VAIPX has a positive alpha of 1.24, which measures performance on a risk-adjusted basis.

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, VAIPX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.84%. VAIPX is actually cheaper than its peers when you consider factors like cost.

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 Inflation Pro Security Admiral ( VAIPX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Vanguard Inflation Pro Security Admiral ( VAIPX ) looks like a somewhat average choice for investors right now.

Want even more information about VAIPX? 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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