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Investors in search of a International Bond - Developed fund might want to consider looking at Vanguard Total International Bond Index Admiral (VTABX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
Zacks categorizes VTABX as International Bond - Developed, a segment that is packed with options. Focusing on fixed income securities outside from developed nations besides the U.S.,International Bond - Developed funds invest in assets from countries like Japan, Germany, the UK, France, and Australia. These holdings dominate the top holdings, and funds in this category offer geographic diversification; however, they can also introduce currency risk.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTABX. Vanguard Total International Bond Index Admiral made its debut in May of 2013, and since then, VTABX has accumulated about $23.96 billion in assets, per the most up-to-date date available. Joshua Barrickman is the fund's current manager and has held that role since May of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of -0.12%, and it sits 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 4.92%, which places it in the bottom 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 12.89%, the standard deviation of VTABX over the past three years is 4.67%. Looking at the past 5 years, the fund's standard deviation is 5.04% compared to the category average of 13.32%. 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.
If you believe interest rates will rise, this is an important factor to look at. VTABX has a modified duration of 7.02, which suggests that the fund will decline 7.02% for every hundred-basis-point increase in interest rates.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 2.6% means that a $10,000 investment should result in a yearly payout of $260.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.
VTABX carries a beta of 0.55, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.75, which measures performance on a risk-adjusted basis.
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, VTABX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.92%. From a cost perspective, VTABX 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 consideration. Returns would be less if those were included.
Bottom Line
Your research on the International Bond - Developed segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is VTABX a Strong Bond Fund Right Now?
Investors in search of a International Bond - Developed fund might want to consider looking at Vanguard Total International Bond Index Admiral (VTABX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
Zacks categorizes VTABX as International Bond - Developed, a segment that is packed with options. Focusing on fixed income securities outside from developed nations besides the U.S.,International Bond - Developed funds invest in assets from countries like Japan, Germany, the UK, France, and Australia. These holdings dominate the top holdings, and funds in this category offer geographic diversification; however, they can also introduce currency risk.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTABX. Vanguard Total International Bond Index Admiral made its debut in May of 2013, and since then, VTABX has accumulated about $23.96 billion in assets, per the most up-to-date date available. Joshua Barrickman is the fund's current manager and has held that role since May of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of -0.12%, and it sits 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 4.92%, which places it in the bottom 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 12.89%, the standard deviation of VTABX over the past three years is 4.67%. Looking at the past 5 years, the fund's standard deviation is 5.04% compared to the category average of 13.32%. 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.
If you believe interest rates will rise, this is an important factor to look at. VTABX has a modified duration of 7.02, which suggests that the fund will decline 7.02% for every hundred-basis-point increase in interest rates.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 2.6% means that a $10,000 investment should result in a yearly payout of $260.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.
VTABX carries a beta of 0.55, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.75, which measures performance on a risk-adjusted basis.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, VTABX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.92%. From a cost perspective, VTABX 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 consideration. Returns would be less if those were included.
Bottom Line
Your research on the International Bond - Developed segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.