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Looking for an Investment Grade Bond - Intermediate fund? You may want to consider Vanguard Core Bond Admiral (VCOBX - Free Report) as a possible option. VCOBX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that VCOBX is an Investment Grade Bond - Intermediate option, which is a segment loaded with many different investment options. By targeting bonds that mature in more than three years but less than 15 years, Investment Grade Bond - Intermediate funds are a middle of the curve option. Fixed income instruments at this maturity level usually have medium duration risk, but their yields are respectable, especially in comparison to their short-maturity counterparts. Additionally, a focus on investment grade makes these funds safer, but yields tend to be lower than in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VCOBX. Since Vanguard Core Bond Admiral made its debut in March of 2016, VCOBX has garnered more than $13.72 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VCOBX has a 5-year annualized total return of -0.37% and is 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 1.94%, 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 VCOBX over the past three years is 7.25% compared to the category average of 10.44%. The standard deviation of the fund over the past 5 years is 6.32% compared to the category average of 9.81%. 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. VCOBX has a modified duration of 6, which suggests that the fund will decline 6% for every hundred-basis-point increase in interest rates.
With a beta of 0.96, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VCOBX has a positive alpha of 0.57, 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, VCOBX has 59.4% in high quality bonds rated at least 'AA' or higher, while 37.7% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
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, VCOBX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.72%. VCOBX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $50,000 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, Vanguard Core Bond Admiral ( VCOBX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
This could just be the start of your research on VCOBXin the Investment Grade Bond - Intermediate 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is VCOBX a Strong Bond Fund Right Now?
Looking for an Investment Grade Bond - Intermediate fund? You may want to consider Vanguard Core Bond Admiral (VCOBX - Free Report) as a possible option. VCOBX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that VCOBX is an Investment Grade Bond - Intermediate option, which is a segment loaded with many different investment options. By targeting bonds that mature in more than three years but less than 15 years, Investment Grade Bond - Intermediate funds are a middle of the curve option. Fixed income instruments at this maturity level usually have medium duration risk, but their yields are respectable, especially in comparison to their short-maturity counterparts. Additionally, a focus on investment grade makes these funds safer, but yields tend to be lower than in the junk bond category.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VCOBX. Since Vanguard Core Bond Admiral made its debut in March of 2016, VCOBX has garnered more than $13.72 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VCOBX has a 5-year annualized total return of -0.37% and is 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 1.94%, 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 VCOBX over the past three years is 7.25% compared to the category average of 10.44%. The standard deviation of the fund over the past 5 years is 6.32% compared to the category average of 9.81%. 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. VCOBX has a modified duration of 6, which suggests that the fund will decline 6% for every hundred-basis-point increase in interest rates.
With a beta of 0.96, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VCOBX has a positive alpha of 0.57, 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, VCOBX has 59.4% in high quality bonds rated at least 'AA' or higher, while 37.7% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
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, VCOBX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.72%. VCOBX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $50,000 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, Vanguard Core Bond Admiral ( VCOBX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
This could just be the start of your research on VCOBXin the Investment Grade Bond - Intermediate 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.