We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Vanguard Total Bond Market Index Admiral (VBTLX) a Strong Mutual Fund Pick Right Now?
Read MoreHide Full Article
Have you been searching for an Index fund? You might want to begin with Vanguard Total Bond Market Index Admiral (VBTLX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBTLX. Since Vanguard Total Bond Market Index Admiral made its debut in November of 2001, VBTLX has garnered more than $105.74 billion in assets. The fund is currently managed by Joshua C. Barrickman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.32%, and is 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 3.06%, 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. The standard deviation of VBTLX over the past three years is 3.35% compared to the category average of 9.14%. The fund's standard deviation over the past 5 years is 3.18% compared to the category average of 9.48%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VBTLX's case, the fund gained 6.21% in the most recent bear market and outperformed its peer group by 49%. This could mean that the fund is a better choice than comparable funds during a bear market.
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's 5-year performance has produced a negative alpha of -0.12, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VBTLX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.86%. VBTLX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Vanguard Total Bond Market Index Admiral (VBTLX) a Strong Mutual Fund Pick Right Now?
Have you been searching for an Index fund? You might want to begin with Vanguard Total Bond Market Index Admiral (VBTLX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VBTLX. Since Vanguard Total Bond Market Index Admiral made its debut in November of 2001, VBTLX has garnered more than $105.74 billion in assets. The fund is currently managed by Joshua C. Barrickman who has been in charge of the fund since February of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.32%, and is 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 3.06%, 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. The standard deviation of VBTLX over the past three years is 3.35% compared to the category average of 9.14%. The fund's standard deviation over the past 5 years is 3.18% compared to the category average of 9.48%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In VBTLX's case, the fund gained 6.21% in the most recent bear market and outperformed its peer group by 49%. This could mean that the fund is a better choice than comparable funds during a bear market.
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's 5-year performance has produced a negative alpha of -0.12, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VBTLX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.86%. VBTLX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.