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There are plenty of choices in the Government Bond - Short category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Short Term Inflation Protected Security Index Investor (VTIPX - Free Report) . VTIPX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VTIPX is one of many Government Bond - Short funds to choose from. Often seen as risk-free assets and described as extremely low-risk from a default perspective,Government Bond - Short funds hold securities issued by the federal government of the United States. Focusing on the short end of the curve, this category can result in n lower yields, but less sensitivity to interest rate fluctuations.
History of Fund/Manager
VTIPX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Short Term Inflation Protected Security Index Investor made its debut in October of 2012, VTIPX has garnered more than $2.90 million in assets. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since October of 2012.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 3.61%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.94%, 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 VTIPX over the past three years is 2.01% compared to the category average of 9.28%. Looking at the past 5 years, the fund's standard deviation is 2.73% compared to the category average of 10.91%. 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, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. VTIPX has a modified duration of 2.38, which suggests that the fund will decline 2.38% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 1% means that a $10,000 investment should result in a yearly payout of $100.
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. Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture.
VTIPX carries a beta of 0.3, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 1.43, 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, VTIPX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.82%. From a cost perspective, VTIPX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
This could just be the start of your research on VTIPX in the Government Bond - Short 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 VTIPX a Strong Bond Fund Right Now?
There are plenty of choices in the Government Bond - Short category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Short Term Inflation Protected Security Index Investor (VTIPX - Free Report) . VTIPX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VTIPX is one of many Government Bond - Short funds to choose from. Often seen as risk-free assets and described as extremely low-risk from a default perspective,Government Bond - Short funds hold securities issued by the federal government of the United States. Focusing on the short end of the curve, this category can result in n lower yields, but less sensitivity to interest rate fluctuations.
History of Fund/Manager
VTIPX finds itself in the Vanguard Group family, based out of Malvern, PA. Since Vanguard Short Term Inflation Protected Security Index Investor made its debut in October of 2012, VTIPX has garnered more than $2.90 million in assets. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since October of 2012.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 3.61%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.94%, 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 VTIPX over the past three years is 2.01% compared to the category average of 9.28%. Looking at the past 5 years, the fund's standard deviation is 2.73% compared to the category average of 10.91%. 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, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. VTIPX has a modified duration of 2.38, which suggests that the fund will decline 2.38% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 1% means that a $10,000 investment should result in a yearly payout of $100.
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. Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture.
VTIPX carries a beta of 0.3, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 1.43, 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, VTIPX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.82%. From a cost perspective, VTIPX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
This could just be the start of your research on VTIPX in the Government Bond - Short 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.