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If you have been looking for Government Mortgage - Intermediate funds, a place to start could be Vanguard GNMA Admiral (VFIJX - Free Report) . VFIJX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Government Mortgage - Intermediate funds is an area filled with choices, such as VFIJX. A mortgage-backed security (MBS) is a type of asset-backed security that packages mortgages together and then sells off the pooled securities. Government Mortgage - Intermediate funds focus on this market; this fund category presents a medium risk and yield profile, and concentrates on MBS with at least three years to maturity but less than 10.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFIJX. Vanguard GNMA Admiral debuted in February of 2001. Since then, VFIJX has accumulated assets of about $8.56 billion, according to the most recently available information. The fund's current manager, Brian Conroy, has been in charge of the fund since May of 2019.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -0.17%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.34%, 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. Over the past three years, VFIJX's standard deviation comes in at 6.3%, compared to the category average of 8.44%. The standard deviation of the fund over the past 5 years is 6.8% compared to the category average of 9.37%. 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 those that believe interest rates will rise, this is an important factor to consider. VFIJX has a modified duration of 5.93, which suggests that the fund will decline 5.93% 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 takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 3.7% means that a $10,000 investment should result in a yearly payout of $370.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.
This fund has a beta of 1.04, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIJX has a positive alpha of 0.63, 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, VFIJX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.84%. From a cost perspective, VFIJX is actually cheaper than its peers.
This fund requires a minimum initial investment of $50,000, 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
Overall, Vanguard GNMA Admiral ( VFIJX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard GNMA Admiral ( VFIJX ) looks like a good potential choice for investors right now.
Want even more information about VFIJX? 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is VFIJX a Strong Bond Fund Right Now?
If you have been looking for Government Mortgage - Intermediate funds, a place to start could be Vanguard GNMA Admiral (VFIJX - Free Report) . VFIJX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Government Mortgage - Intermediate funds is an area filled with choices, such as VFIJX. A mortgage-backed security (MBS) is a type of asset-backed security that packages mortgages together and then sells off the pooled securities. Government Mortgage - Intermediate funds focus on this market; this fund category presents a medium risk and yield profile, and concentrates on MBS with at least three years to maturity but less than 10.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFIJX. Vanguard GNMA Admiral debuted in February of 2001. Since then, VFIJX has accumulated assets of about $8.56 billion, according to the most recently available information. The fund's current manager, Brian Conroy, has been in charge of the fund since May of 2019.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -0.17%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.34%, 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. Over the past three years, VFIJX's standard deviation comes in at 6.3%, compared to the category average of 8.44%. The standard deviation of the fund over the past 5 years is 6.8% compared to the category average of 9.37%. 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 those that believe interest rates will rise, this is an important factor to consider. VFIJX has a modified duration of 5.93, which suggests that the fund will decline 5.93% 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 takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 3.7% means that a $10,000 investment should result in a yearly payout of $370.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.
This fund has a beta of 1.04, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VFIJX has a positive alpha of 0.63, 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, VFIJX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.84%. From a cost perspective, VFIJX is actually cheaper than its peers.
This fund requires a minimum initial investment of $50,000, 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
Overall, Vanguard GNMA Admiral ( VFIJX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Vanguard GNMA Admiral ( VFIJX ) looks like a good potential choice for investors right now.
Want even more information about VFIJX? 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.