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Is Vanguard Total Bond Market Index Admiral (VBTLX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Index funds, consider Vanguard Total Bond Market Index Admiral (VBTLX - Free Report) as a possibility. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBTLX. The Vanguard Total Bond Market Index Admiral made its debut in November of 2001 and VBTLX has managed to accumulate roughly $85.27 billion in assets, as of the most recently available information. The fund's current manager, Joshua C. Barrickman, has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.4%, and is in the bottom 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 1.72%, which places it in the bottom third during this time-frame.
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, VBTLX's standard deviation comes in at 2.8%, compared to the category average of 8.79%. Over the past 5 years, the standard deviation of the fund is 2.85% compared to the category average of 8.68%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, VBTLX gained 6.21% and underperformed comparable funds by 52.76%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.04, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VBTLX has generated a negative alpha over the past five years of -0.17, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VBTLX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.85%. So, VBTLX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $10,000; each subsequent investment needs to be at least $1.
Bottom Line
For additional information on the Index area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VBTLX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Vanguard Total Bond Market Index Admiral (VBTLX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Index funds, consider Vanguard Total Bond Market Index Admiral (VBTLX - Free Report) as a possibility. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBTLX. The Vanguard Total Bond Market Index Admiral made its debut in November of 2001 and VBTLX has managed to accumulate roughly $85.27 billion in assets, as of the most recently available information. The fund's current manager, Joshua C. Barrickman, has been in charge of the fund since February of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.4%, and is in the bottom 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 1.72%, which places it in the bottom third during this time-frame.
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, VBTLX's standard deviation comes in at 2.8%, compared to the category average of 8.79%. Over the past 5 years, the standard deviation of the fund is 2.85% compared to the category average of 8.68%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, VBTLX gained 6.21% and underperformed comparable funds by 52.76%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.04, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. VBTLX has generated a negative alpha over the past five years of -0.17, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, VBTLX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.85%. So, VBTLX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $10,000; each subsequent investment needs to be at least $1.
Bottom Line
For additional information on the Index area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VBTLX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.