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Have you been searching for a Diversified Bonds fund? You might want to begin with Vanguard Intermediate-Term Bond Index Investor (VBIIX - 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
VBIIX is one of many Diversified Bonds funds to choose from.Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
Vanguard Group is responsible for VBIIX, and the company is based out of Malvern, PA. The Vanguard Intermediate-Term Bond Index Investor made its debut in February of 1994 and VBIIX has managed to accumulate roughly $39.66 million in assets, as of the most recently available information. Joshua Barrickman is the fund's current manager and has held that role since April of 2008.
Performance
Investors naturally seek funds with strong performance. VBIIX has a 5-year annualized total return of 0.48%, and is in the top 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 3.92%, 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 VBIIX over the past three years is 5.87% compared to the category average of 9.18%. The standard deviation of the fund over the past 5 years is 6.75% compared to the category average of 10.9%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. VBIIX has a modified duration of 6.08, which suggests that the fund will decline 6.08% for every hundred-basis-point increase in interest rates.
VBIIX carries a beta of 1.03, 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 0.36, 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, VBIIX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.81%. So, VBIIX is actually cheaper than its peers from a cost perspective.
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
For additional information on this product, or to compare it to other mutual funds in the Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is VBIIX a Strong Bond Fund Right Now?
Have you been searching for a Diversified Bonds fund? You might want to begin with Vanguard Intermediate-Term Bond Index Investor (VBIIX - 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
VBIIX is one of many Diversified Bonds funds to choose from.Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
Vanguard Group is responsible for VBIIX, and the company is based out of Malvern, PA. The Vanguard Intermediate-Term Bond Index Investor made its debut in February of 1994 and VBIIX has managed to accumulate roughly $39.66 million in assets, as of the most recently available information. Joshua Barrickman is the fund's current manager and has held that role since April of 2008.
Performance
Investors naturally seek funds with strong performance. VBIIX has a 5-year annualized total return of 0.48%, and is in the top 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 3.92%, 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 VBIIX over the past three years is 5.87% compared to the category average of 9.18%. The standard deviation of the fund over the past 5 years is 6.75% compared to the category average of 10.9%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. VBIIX has a modified duration of 6.08, which suggests that the fund will decline 6.08% for every hundred-basis-point increase in interest rates.
VBIIX carries a beta of 1.03, 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 0.36, 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, VBIIX is a no load fund. It has an expense ratio of 0.15% compared to the category average of 0.81%. So, VBIIX is actually cheaper than its peers from a cost perspective.
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
For additional information on this product, or to compare it to other mutual funds in the Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.