We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
On the lookout for a Government Bond - Short fund? Starting with Vanguard Short-Term Federal Investor (VSGBX - Free Report) is one possibility. VSGBX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
VSGBX 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
Vanguard Group is based in Malvern, PA, and is the manager of VSGBX. The Vanguard Short-Term Federal Investor made its debut in December of 1987 and VSGBX has managed to accumulate roughly $342.29 million in assets, as of the most recently available information. The fund's current manager, Brian Quigley, has been in charge of the fund since January of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 1.62%, and is 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 4.26%, 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 6.5%, the standard deviation of VSGBX over the past three years is 2.88%. The fund's standard deviation over the past 5 years is 2.8% compared to the category average of 7.54%. 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 investors who think interest rates will rise, this is an important factor to consider. VSGBX has a modified duration of 2.26, which suggests that the fund will decline 2.26% 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. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 3.43% means that a $10,000 investment should result in a yearly payout of $343.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
With a beta of 0.5, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VSGBX has a negative alpha of -1.02 , 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, VSGBX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.71%. VSGBX is actually cheaper than its peers when you consider factors like cost.
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
Overall, Vanguard Short-Term Federal Investor ( VSGBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Government Bond - Short funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VSGBX to its peers as well 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.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Is VSGBX a Strong Bond Fund Right Now?
On the lookout for a Government Bond - Short fund? Starting with Vanguard Short-Term Federal Investor (VSGBX - Free Report) is one possibility. VSGBX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
VSGBX 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
Vanguard Group is based in Malvern, PA, and is the manager of VSGBX. The Vanguard Short-Term Federal Investor made its debut in December of 1987 and VSGBX has managed to accumulate roughly $342.29 million in assets, as of the most recently available information. The fund's current manager, Brian Quigley, has been in charge of the fund since January of 2015.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 1.62%, and is 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 4.26%, 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 6.5%, the standard deviation of VSGBX over the past three years is 2.88%. The fund's standard deviation over the past 5 years is 2.8% compared to the category average of 7.54%. 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 investors who think interest rates will rise, this is an important factor to consider. VSGBX has a modified duration of 2.26, which suggests that the fund will decline 2.26% 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. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 3.43% means that a $10,000 investment should result in a yearly payout of $343.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
With a beta of 0.5, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VSGBX has a negative alpha of -1.02 , 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, VSGBX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.71%. VSGBX is actually cheaper than its peers when you consider factors like cost.
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
Overall, Vanguard Short-Term Federal Investor ( VSGBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Government Bond - Short funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VSGBX to its peers as well 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.