If investors are looking at the Investment Grade Bond - Intermediate fund category, Vanguard Intermediate-Term Investment-Grade Investor (VFICX Quick QuoteVFICX - Free Report) could be a potential option. VFICX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify VFICX in the Investment Grade Bond - Intermediate category, an area rife with potential choices. Investment Grade Bond - Intermediate funds target the middle part of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. At these maturity levels, fixed income instruments have medium duration risk--but they compensate investors with a respectable yield compared to shorter maturity options. Finally, a focus on investment grade ensures that these funds are safer, but yields will be lower than in the junk bond category.

History of Fund/Manager

VFICX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Intermediate-Term Investment-Grade Investor made its debut in November of 1993, VFICX has garnered more than $1.56 billion in assets. Daniel Shaykevich is the fund's current manager and has held that role since April of 2018.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 1.69%, 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 -0.4%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. VFICX's standard deviation over the past three years is 8.86% compared to the category average of 11.59%. The standard deviation of the fund over the past 5 years is 7.64% compared to the category average of 11.87%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 1.02, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VFICX has a positive alpha of 1.79, which measures performance on a risk-adjusted basis.

Ratings

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, VFICX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.77%. Looking at the fund from a cost perspective, VFICX is actually cheaper than its peers.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

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

For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds 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.