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Investment Grade Bond - Intermediate fund seekers should consider taking a look at Vanguard Core Bond Investor (VCORX - Free Report) . VCORX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify VCORX in the Investment Grade Bond - Intermediate category, an area rife with potential choices. Investment Grade Bond - Intermediate funds target the middle part of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. At these maturity levels, fixed income instruments have medium duration risk--but they compensate investors with a respectable yield compared to shorter maturity options. Finally, a focus on investment grade ensures that these funds are safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VCORX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Core Bond Investor made its debut in March of 2016, and since then, VCORX has accumulated about $248.92 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VCORX has a 5-year annualized total return of -0.47%, 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 4.4%, 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 8.44%, the standard deviation of VCORX over the past three years is 5.91%. The standard deviation of the fund over the past 5 years is 6.56% compared to the category average of 9.57%. 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. VCORX has a modified duration of 5.66, which suggests that the fund will decline 5.66% for every hundred-basis-point increase in interest rates.
With a beta of 0.98, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VCORX has a positive alpha of 0.18 , which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade "AAA" to "D" given to a bond that indicates its credit quality. With this letter scale in mind, VCORX has 60.4% in high quality bonds rated at least "AA" or higher, while 33.7% are of medium quality, with ratings of "A" to "BBB". The fund has an average quality of AA, and focuses on high quality securities.
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, VCORX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.69%. So, VCORX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to 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
Overall, Vanguard Core Bond Investor ( VCORX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Core Bond Investor ( VCORX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds 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.
View the Zacks #1 Rank List
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Is VCORX a Strong Bond Fund Right Now?
Investment Grade Bond - Intermediate fund seekers should consider taking a look at Vanguard Core Bond Investor (VCORX - Free Report) . VCORX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify VCORX in the Investment Grade Bond - Intermediate category, an area rife with potential choices. Investment Grade Bond - Intermediate funds target the middle part of the curve, typically by investing in bonds that mature in more than three years but less than 15 years. At these maturity levels, fixed income instruments have medium duration risk--but they compensate investors with a respectable yield compared to shorter maturity options. Finally, a focus on investment grade ensures that these funds are safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VCORX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Core Bond Investor made its debut in March of 2016, and since then, VCORX has accumulated about $248.92 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. VCORX has a 5-year annualized total return of -0.47%, 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 4.4%, 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 8.44%, the standard deviation of VCORX over the past three years is 5.91%. The standard deviation of the fund over the past 5 years is 6.56% compared to the category average of 9.57%. 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. VCORX has a modified duration of 5.66, which suggests that the fund will decline 5.66% for every hundred-basis-point increase in interest rates.
With a beta of 0.98, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VCORX has a positive alpha of 0.18 , which measures performance on a risk-adjusted basis.Ratings
Investors should also consider a bond's rating, which is a grade "AAA" to "D" given to a bond that indicates its credit quality. With this letter scale in mind, VCORX has 60.4% in high quality bonds rated at least "AA" or higher, while 33.7% are of medium quality, with ratings of "A" to "BBB". The fund has an average quality of AA, and focuses on high quality securities.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, VCORX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.69%. So, VCORX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to 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
Overall, Vanguard Core Bond Investor ( VCORX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Core Bond Investor ( VCORX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds 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.