If investors are looking at the Government - Bonds: Misc fund category, make sure to pass over Vanguard Inflation-Protected Securites Admiral (VAIPX Quick QuoteVAIPX - Free Report) . VAIPX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

VAIPX is one of many Government - Bonds: Misc funds to choose from. In their portfolios,Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.

History of Fund/Manager

VAIPX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Inflation-Protected Securites Admiral made its debut in June of 2005, VAIPX has garnered more than $13.80 billion in assets. John Madziyire is the fund's current manager and has held that role since November of 2021.

Performance

Of course, investors look for strong performance in funds. VAIPX has a 5-year annualized total return of 1.54%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.46%, 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. The standard deviation of VAIPX over the past three years is 4.8% compared to the category average of 9.47%. Looking at the past 5 years, the fund's standard deviation is 6.04% compared to the category average of 10.92%. 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. VAIPX 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 calculates the fund's average payout 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.

While a higher coupon is good for when you want a strong level of current income, it could present 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.

With a beta of 0.75, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VAIPX has a positive alpha of 1.21 , 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, VAIPX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.83%. VAIPX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $50,000, and each subsequent investment should 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

Overall, even with its comparatively similar performance, average downside risk, and lower fees, Vanguard Inflation-Protected Securites Admiral ( VAIPX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.

For additional information on the Government - Bonds: Misc area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VAIPX too 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.