We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Any investors hoping to find a Government - Bonds: Misc fund might consider looking past Vanguard Inflation Protected Securities Fund (VIPSX - Free Report) . VIPSX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that VIPSX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VIPSX. Vanguard Inflation Protected Securities Fund made its debut in June of 2000, and since then, VIPSX has accumulated about $2.11 billion in assets, per the most up-to-date date available. John Madziyire is the fund's current manager and has held that role since November of 2021.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 1.43%, 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 0.69%, 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. VIPSX's standard deviation over the past three years is 7.03% compared to the category average of 11.46%. The fund's standard deviation over the past 5 years is 6.14% compared to the category average of 11.16%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. VIPSX has a modified duration of 6.76, which suggests that the fund will decline 6.76% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 1.15% means that a $10,000 investment should result in a yearly payout of $115.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. This fund has a beta of 0.66, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VIPSX has a positive alpha of 1.79, 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, VIPSX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.82%. From a cost perspective, VIPSX is actually cheaper than its peers.
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, better downside risk, and lower fees, Vanguard Inflation Protected Securities Fund ( VIPSX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
This could just be the start of your research on VIPSXin the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is VIPSX a Strong Bond Fund Right Now?
Any investors hoping to find a Government - Bonds: Misc fund might consider looking past Vanguard Inflation Protected Securities Fund (VIPSX - Free Report) . VIPSX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that VIPSX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VIPSX. Vanguard Inflation Protected Securities Fund made its debut in June of 2000, and since then, VIPSX has accumulated about $2.11 billion in assets, per the most up-to-date date available. John Madziyire is the fund's current manager and has held that role since November of 2021.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 1.43%, 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 0.69%, 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. VIPSX's standard deviation over the past three years is 7.03% compared to the category average of 11.46%. The fund's standard deviation over the past 5 years is 6.14% compared to the category average of 11.16%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. VIPSX has a modified duration of 6.76, which suggests that the fund will decline 6.76% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 1.15% means that a $10,000 investment should result in a yearly payout of $115.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. This fund has a beta of 0.66, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VIPSX has a positive alpha of 1.79, 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, VIPSX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.82%. From a cost perspective, VIPSX is actually cheaper than its peers.
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, better downside risk, and lower fees, Vanguard Inflation Protected Securities Fund ( VIPSX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
This could just be the start of your research on VIPSXin the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.