Yahoo Finance Is VFSTX a Strong Bond Fund Right Now?
If you have been looking for Investment Grade Bond - Short funds, a place to start could be Vanguard Short-Term Investment Grade Fund Investor (VFSTX). VFSTX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
VFSTX is classified in the Investment Grade Bond - Short segment by Zacks, an area full of investment potential. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. Fixed income instruments at this maturity level tend to have low duration risk, but they also pay out small yields compared to their longer-dated peers. Furthermore, these funds'focus on investment grade make them safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VFSTX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Short-Term Investment Grade Fund Investor made its debut in October of 1982, VFSTX has garnered more than $6.32 billion in assets. Daniel Shaykevich is the fund's current manager and has held that role since April of 2018.
Performance
Of course, investors look for strong performance in funds. VFSTX has a 5-year annualized total return of 1.94% 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 -0.07%, which places it in the middle 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, VFSTX's standard deviation comes in at 3.47%, compared to the category average of 10.42%. Looking at the past 5 years, the fund's standard deviation is 3.45% compared to the category average of 11.31%. This makes the fund less volatile than its peers over the past half-decade.
VFSTX carries a beta of 0.43, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.49, 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, VFSTX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.84%. From a cost perspective, VFSTX is actually cheaper than its peers.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Vanguard Short-Term Investment Grade Fund Investor ( VFSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Want even more information about VFSTX? 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. 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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