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Is VFSUX a Strong Bond Fund Right Now?

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Mutual Fund Bond fund seekers should consider taking a look at Vanguard Short-Term Investment-Grade Admiral (VFSUX - Free Report) . VFSUX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VFSUX. Vanguard Short-Term Investment-Grade Admiral made its debut in February of 2001, and since then, VFSUX has accumulated about $55.83 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. VFSUX has a 5-year annualized total return of 2.59% 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 3.89%, 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. VFSUX's standard deviation over the past three years is 2.73% compared to the category average of 11.05%. Looking at the past 5 years, the fund's standard deviation is 2.27% compared to the category average of 9.16%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.47, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VFSUX has a positive alpha of 0.59, 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, VFSUX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.72%. From a cost perspective, VFSUX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $50,000; each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Short-Term Investment-Grade Admiral ( VFSUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about VFSUX? 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. 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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