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Are you on the hunt for a Government Mortgage - Intermediate fund? You should think about starting with Vanguard GNMA Investor (VFIIX - 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
We classify VFIIX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS' that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
History of Fund/Manager
Vanguard Group is responsible for VFIIX, and the company is based out of Malvern, PA. Vanguard GNMA Investor debuted in June of 1980. Since then, VFIIX has accumulated assets of about $1.99 billion, according to the most recently available information. The fund is currently managed by Brian Conroy who has been in charge of the fund since May of 2019.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VFIIX has a 5-year annualized total return of 0.69%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.22%, 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. Over the past three years, VFIIX's standard deviation comes in at 5.94%, compared to the category average of 9.3%. Over the past 5 years, the standard deviation of the fund is 6.41% compared to the category average of 10.35%. 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. VFIIX has a modified duration of 5.19, which suggests that the fund will decline 5.19% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often 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 3.7% means that a $10,000 investment should result in a yearly payout of $370.
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.
VFIIX carries a beta of 1.02, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.28, 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, VFIIX is a no load fund. It has an expense ratio of 0.21% compared to the category average of 0.84%. So, VFIIX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
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 VFIIX in the Government Mortgage - 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. 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 VFIIX a Strong Bond Fund Right Now?
Are you on the hunt for a Government Mortgage - Intermediate fund? You should think about starting with Vanguard GNMA Investor (VFIIX - 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
We classify VFIIX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS' that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
History of Fund/Manager
Vanguard Group is responsible for VFIIX, and the company is based out of Malvern, PA. Vanguard GNMA Investor debuted in June of 1980. Since then, VFIIX has accumulated assets of about $1.99 billion, according to the most recently available information. The fund is currently managed by Brian Conroy who has been in charge of the fund since May of 2019.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VFIIX has a 5-year annualized total return of 0.69%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.22%, 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. Over the past three years, VFIIX's standard deviation comes in at 5.94%, compared to the category average of 9.3%. Over the past 5 years, the standard deviation of the fund is 6.41% compared to the category average of 10.35%. 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. VFIIX has a modified duration of 5.19, which suggests that the fund will decline 5.19% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often 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 3.7% means that a $10,000 investment should result in a yearly payout of $370.
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.
VFIIX carries a beta of 1.02, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.28, 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, VFIIX is a no load fund. It has an expense ratio of 0.21% compared to the category average of 0.84%. So, VFIIX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
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 VFIIX in the Government Mortgage - 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. 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.