Investors in search of a Diversified Bonds fund might want to consider looking at Vanguard Intermediate-Term Bond Index Admiral (VBILX Quick QuoteVBILX - Free Report) . VBILX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

Objective

We classify VBILX in the Diversified Bonds category, an area that is rife with potential choices.Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VBILX. The Vanguard Intermediate-Term Bond Index Admiral made its debut in November of 2001 and VBILX has managed to accumulate roughly $18.04 billion 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. This fund carries a 5-year annualized total return of -0.61%, and is 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 4.27%, 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 VBILX over the past three years is 6.18% compared to the category average of 9.76%. The fund's standard deviation over the past 5 years is 6.94% compared to the category average of 11.22%. 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.

For those that believe interest rates will rise, this is an important factor to consider. VBILX has a modified duration of 6.06, which suggests that the fund will decline 6.06% for every hundred-basis-point increase in interest rates.

With a beta of 1.01, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VBILX has a positive alpha of 0.3 , 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, VBILX is a no load fund. It has an expense ratio of 0.06% compared to the category average of 0.81%. VBILX 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

Want even more information about VBILX? 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. 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.