Back to top

Image: Bigstock

Is VIPSX a Strong Bond Fund Right Now?

Read MoreHide Full Article

If you're looking for a Government - Bonds: Misc fund category, then a potential option is Vanguard Inflation Pro Security Fund (VIPSX - Free Report) . VIPSX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that VIPSX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.

History of Fund/Manager

VIPSX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Inflation Pro Security Fund debuted in June of 2000. Since then, VIPSX has accumulated assets of about $3.75 billion, according to the most recently available information. The fund's current manager, Gemma Wright Casparius, has been in charge of the fund since August of 2011.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 4.2%, 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 6.28%, 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 VIPSX 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.

With a beta of 0.88, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VIPSX has a positive alpha of 1.14, 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, VIPSX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.84%. From a cost perspective, VIPSX is actually cheaper than its peers.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.

Bottom Line

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

Want even more information about VIPSX? 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


VANGUARD INFLA PROTD SEC FD (VIPSX) - free report >>

Published in