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Is VFIDX a Strong Bond Fund Right Now?

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Mutual Fund Bond fund seekers may want to consider taking a look at Vanguard Intermediate-Term Investment-Grade Admiral (VFIDX - Free Report) . VFIDX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VFIDX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Intermediate-Term Investment-Grade Admiral made its debut in February of 2001, and since then, VFIDX has accumulated about $29.95 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 1.67%, and it sits in the bottom 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 0.87%, which places it in the bottom 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. VFIDX's standard deviation over the past three years is 5.99% compared to the category average of 11.11%. The fund's standard deviation over the past 5 years is 4.91% 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 1.1, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VFIDX has a positive alpha of 0.48, which measures performance on a risk-adjusted basis.

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 0.77%. So, VFIDX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $1.

Bottom Line

Overall, Vanguard Intermediate-Term Investment-Grade Admiral ( VFIDX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Bond, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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