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There are plenty of choices in the Investment Grade Bond - Short category, but where should you start your research? Well, one fund that may not be worth investigating is Vanguard Short-Term Investment-Grade Admiral (VFSUX - Free Report) . VFSUX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VFSUX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFSUX. The Vanguard Short-Term Investment-Grade Admiral made its debut in February of 2001 and VFSUX has managed to accumulate roughly $36.85 billion in assets, as of the most recently available information. The fund's current manager, Daniel Shaykevich, has been in charge of the fund since April of 2018.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 2.34%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.37%, 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. The standard deviation of VFSUX over the past three years is 3.46% compared to the category average of 10.09%. The fund's standard deviation over the past 5 years is 3.1% compared to the category average of 9.83%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.43, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VFSUX has a positive alpha of 1.17, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VFSUX has 83.1% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 1.4%, giving VFSUX an average quality of A. This means that it focuses on high quality securities.
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 0.82%. From a cost perspective, VFSUX is actually cheaper than its peers.
While the minimum initial investment for the product is $50,000, 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, even with its comparatively similar performance, better downside risk, and lower fees, Vanguard Short-Term Investment-Grade Admiral ( VFSUX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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. 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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Is VFSUX a Strong Bond Fund Right Now?
There are plenty of choices in the Investment Grade Bond - Short category, but where should you start your research? Well, one fund that may not be worth investigating is Vanguard Short-Term Investment-Grade Admiral (VFSUX - Free Report) . VFSUX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
VFSUX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFSUX. The Vanguard Short-Term Investment-Grade Admiral made its debut in February of 2001 and VFSUX has managed to accumulate roughly $36.85 billion in assets, as of the most recently available information. The fund's current manager, Daniel Shaykevich, has been in charge of the fund since April of 2018.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 2.34%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.37%, 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. The standard deviation of VFSUX over the past three years is 3.46% compared to the category average of 10.09%. The fund's standard deviation over the past 5 years is 3.1% compared to the category average of 9.83%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.43, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VFSUX has a positive alpha of 1.17, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VFSUX has 83.1% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 1.4%, giving VFSUX an average quality of A. This means that it focuses on high quality securities.
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 0.82%. From a cost perspective, VFSUX is actually cheaper than its peers.
While the minimum initial investment for the product is $50,000, 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, even with its comparatively similar performance, better downside risk, and lower fees, Vanguard Short-Term Investment-Grade Admiral ( VFSUX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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. 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.