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Any investors who are searching for Investment Grade Bond - Short funds should take a look at Vanguard ST Corporate Bond Index Admiral (VSCSX - Free Report) . VSCSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VSCSX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.
History of Fund/Manager
Vanguard Group is responsible for VSCSX, and the company is based out of Malvern, PA. The Vanguard ST Corporate Bond Index Admiral made its debut in November of 2009 and VSCSX has managed to accumulate roughly $4.42 billion in assets, as of the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since November of 2010.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.38%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.39%, 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. Compared to the category average of 6.2%, the standard deviation of VSCSX over the past three years is 2.44%. Over the past 5 years, the standard deviation of the fund is 3.09% compared to the category average of 7.43%. 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. VSCSX has a modified duration of 2.66, which suggests that the fund will decline 2.66% 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 calculates the fund's average payout in a given year. For example, this fund's average coupon of 4.24% means that a $10,000 investment should result in a yearly payout of $424.
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. Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks.
This fund has a beta of 0.38, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VSCSX has a positive alpha of 0.37, 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, VSCSX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.75%. VSCSX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $3,000, 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
Want even more information about VSCSX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.
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Is VSCSX a Strong Bond Fund Right Now?
Any investors who are searching for Investment Grade Bond - Short funds should take a look at Vanguard ST Corporate Bond Index Admiral (VSCSX - Free Report) . VSCSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
VSCSX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.
History of Fund/Manager
Vanguard Group is responsible for VSCSX, and the company is based out of Malvern, PA. The Vanguard ST Corporate Bond Index Admiral made its debut in November of 2009 and VSCSX has managed to accumulate roughly $4.42 billion in assets, as of the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since November of 2010.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.38%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.39%, 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. Compared to the category average of 6.2%, the standard deviation of VSCSX over the past three years is 2.44%. Over the past 5 years, the standard deviation of the fund is 3.09% compared to the category average of 7.43%. 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. VSCSX has a modified duration of 2.66, which suggests that the fund will decline 2.66% 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 calculates the fund's average payout in a given year. For example, this fund's average coupon of 4.24% means that a $10,000 investment should result in a yearly payout of $424.
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. Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks.
This fund has a beta of 0.38, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VSCSX has a positive alpha of 0.37, 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, VSCSX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.75%. VSCSX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $3,000, 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
Want even more information about VSCSX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.