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Are you on the hunt for a Government Bond - Short fund? You should think about starting with Vanguard Short Term Inflation Protected Security Index Investor (VTIPX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VTIPX 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 VTIPX. Vanguard Short Term Inflation Protected Security Index Investor debuted in October of 2012. Since then, VTIPX has accumulated assets of about $3.58 million, according to the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since October of 2012.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.28%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.1%, 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 8.65%, the standard deviation of VTIPX over the past three years is 2.25%. The fund's standard deviation over the past 5 years is 2.9% compared to the category average of 10.55%. 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. VTIPX has a modified duration of 2.47, which suggests that the fund will decline 2.47% 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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 1.08% means that a $10,000 investment should result in a yearly payout of $108.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
This fund has a beta of 0.36, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VTIPX has a positive alpha of 0.32, 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, VTIPX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.80%. Looking at the fund from a cost perspective, VTIPX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; 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
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 VTIPX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is VTIPX a Strong Bond Fund Right Now?
Are you on the hunt for a Government Bond - Short fund? You should think about starting with Vanguard Short Term Inflation Protected Security Index Investor (VTIPX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
VTIPX 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 VTIPX. Vanguard Short Term Inflation Protected Security Index Investor debuted in October of 2012. Since then, VTIPX has accumulated assets of about $3.58 million, according to the most recently available information. The fund's current manager, Joshua Barrickman, has been in charge of the fund since October of 2012.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.28%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.1%, 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 8.65%, the standard deviation of VTIPX over the past three years is 2.25%. The fund's standard deviation over the past 5 years is 2.9% compared to the category average of 10.55%. 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. VTIPX has a modified duration of 2.47, which suggests that the fund will decline 2.47% 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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 1.08% means that a $10,000 investment should result in a yearly payout of $108.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
This fund has a beta of 0.36, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VTIPX has a positive alpha of 0.32, 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, VTIPX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.80%. Looking at the fund from a cost perspective, VTIPX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; 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
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 VTIPX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.