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There are plenty of choices in the International Bond - Developed category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Total International Bond Index Investor (VTIBX - 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
VTIBX is one of many International Bond - Developed funds to choose from. International Bond - Developed funds offer investors geographic diversification by focusing on fixed income securities from developed nations besides the United States. Top holdings include assets from countries like Japan, Germany, the UK, France, and Australia. While these is certainly an advantage, investors should be aware of currency risk.
History of Fund/Manager
VTIBX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Total International Bond Index Investor made its debut in May of 2013, and since then, VTIBX has accumulated about $18.52 million in assets, per the most up-to-date date available. The fund's current manager, Joshua Barrickman, has been in charge of the fund since May of 2013.
Performance
Of course, investors look for strong performance in funds. VTIBX has a 5-year annualized total return of -0.11%, and it sits 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 4.18%, 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 VTIBX over the past three years is 4.58% compared to the category average of 9.25%. The fund's standard deviation over the past 5 years is 5.08% compared to the category average of 10.46%. 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.
For investors who think interest rates will rise, this is an important factor to consider. VTIBX 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. This metric takes a look at the average payout by the fund 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.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond. Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks.
With a beta of 0.59, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VTIBX has a negative alpha of -0.88 , which measures performance on a risk-adjusted basis.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTIBX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 0.82%. Looking at the fund from a cost perspective, VTIBX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on the International Bond - Developed 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 VTIBX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is VTIBX a Strong Bond Fund Right Now?
There are plenty of choices in the International Bond - Developed category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Total International Bond Index Investor (VTIBX - 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
VTIBX is one of many International Bond - Developed funds to choose from. International Bond - Developed funds offer investors geographic diversification by focusing on fixed income securities from developed nations besides the United States. Top holdings include assets from countries like Japan, Germany, the UK, France, and Australia. While these is certainly an advantage, investors should be aware of currency risk.
History of Fund/Manager
VTIBX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Total International Bond Index Investor made its debut in May of 2013, and since then, VTIBX has accumulated about $18.52 million in assets, per the most up-to-date date available. The fund's current manager, Joshua Barrickman, has been in charge of the fund since May of 2013.
Performance
Of course, investors look for strong performance in funds. VTIBX has a 5-year annualized total return of -0.11%, and it sits 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 4.18%, 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 VTIBX over the past three years is 4.58% compared to the category average of 9.25%. The fund's standard deviation over the past 5 years is 5.08% compared to the category average of 10.46%. 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.
For investors who think interest rates will rise, this is an important factor to consider. VTIBX 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. This metric takes a look at the average payout by the fund 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.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur if rates are lower in the future when compared to the initial purchase date of the bond. Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks.
With a beta of 0.59, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VTIBX has a negative alpha of -0.88 , which measures performance on a risk-adjusted basis.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTIBX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 0.82%. Looking at the fund from a cost perspective, VTIBX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on the International Bond - Developed 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 VTIBX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.