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If you have been looking for Investment Grade Bond - Long funds, it would not be wise to start your search with Vanguard Long-Term Investment-Grade Income Investor (VWESX - Free Report) . VWESX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Investment Grade Bond - Long funds is an area filled with options, such as VWESX. With a focus on bonds that mature in more than 10 years, Investment Grade Bond - Long funds target the long end of the curve. Investors do inherit a higher duration risk with fixed income instruments at this maturity level, but these funds typically provide a higher yield, at least when compared to their short-maturity counterparts. Finally, investors should also note that the focus on investment grade does make these funds safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VWESX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Long-Term Investment-Grade Income Investor debuted in July of 1973. Since then, VWESX has accumulated assets of about $3.86 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of -3%, and is 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 -3.67%, which places it in the middle 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. Compared to the category average of 14.76%, the standard deviation of VWESX over the past three years is 15.97%. Over the past 5 years, the standard deviation of the fund is 14.19% compared to the category average of 14.64%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 1.74, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VWESX has a positive alpha of 1.54, which measures performance on a risk-adjusted basis.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWESX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 0.72%. So, VWESX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Vanguard Long-Term Investment-Grade Income Investor ( VWESX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Long, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is VWESX a Strong Bond Fund Right Now?
If you have been looking for Investment Grade Bond - Long funds, it would not be wise to start your search with Vanguard Long-Term Investment-Grade Income Investor (VWESX - Free Report) . VWESX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Investment Grade Bond - Long funds is an area filled with options, such as VWESX. With a focus on bonds that mature in more than 10 years, Investment Grade Bond - Long funds target the long end of the curve. Investors do inherit a higher duration risk with fixed income instruments at this maturity level, but these funds typically provide a higher yield, at least when compared to their short-maturity counterparts. Finally, investors should also note that the focus on investment grade does make these funds safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VWESX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Long-Term Investment-Grade Income Investor debuted in July of 1973. Since then, VWESX has accumulated assets of about $3.86 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of -3%, and is 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 -3.67%, which places it in the middle 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. Compared to the category average of 14.76%, the standard deviation of VWESX over the past three years is 15.97%. Over the past 5 years, the standard deviation of the fund is 14.19% compared to the category average of 14.64%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 1.74, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VWESX has a positive alpha of 1.54, which measures performance on a risk-adjusted basis.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VWESX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 0.72%. So, VWESX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Vanguard Long-Term Investment-Grade Income Investor ( VWESX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Long, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.