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Is VAIPX a Strong Bond Fund Right Now?

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There are plenty of choices in the Government - Bonds: Misc category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard Inflation Pro Security Admiral (VAIPX - Free Report) . VAIPX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

VAIPX is one of many Government - Bonds: Misc funds to choose from. In their portfolios, Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VAIPX. Vanguard Inflation Pro Security Admiral made its debut in June of 2005, and since then, VAIPX has accumulated about $15.32 billion in assets, per the most up-to-date date available. The fund is currently managed by Gemma Wright Casparius who has been in charge of the fund since August of 2011.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.23%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 4.17%, which places it in the top 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. VAIPX's standard deviation over the past three years is 3.5% compared to the category average of 9.65%. The standard deviation of the fund over the past 5 years is 3.43% compared to the category average of 8.92%. This makes the fund less volatile than its peers over the past half-decade.

VAIPX carries a beta of 0.95, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.57, which measures performance on a risk-adjusted basis.

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, VAIPX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.89%. VAIPX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Inflation Pro Security Admiral ( VAIPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Vanguard Inflation Pro Security Admiral ( VAIPX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Government - Bonds: Misc funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VAIPX to its peers as well 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.


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