Are you on the hunt for a Government Bond - Short fund? You should think about starting with Vanguard Short Term Inflation Protected Security Index Investor (VTIPX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
We note that VTIPX is a Government Bond - Short option, an area packed with various choices. Have securities issued by the United States' federal government in their portfolios. Generally, these are seen as extremely low risk from a default perspective and often regarded as risk-free. Government Bond - Short funds focus on the short end of the curve, which results in lower yields, but less sensitivity to interest rate fluctuations.
History of Fund/Manager
VTIPX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Short Term Inflation Protected Security Index Investor debuted in October of 2012. Since then, VTIPX has accumulated assets of about $2.60 million, according to the most recently available information. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since October of 2012.
Performance
Of course, investors look for strong performance in funds. VTIPX has a 5-year annualized total return of 3.39% 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 2.16%, 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, VTIPX's standard deviation comes in at 3.11%, compared to the category average of 11.99%. Over the past 5 years, the standard deviation of the fund is 2.87% compared to the category average of 12.44%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.19, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VTIPX has a positive alpha of 1.65, which measures performance on a risk-adjusted basis.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VTIPX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.82%. Looking at the fund from a cost perspective, VTIPX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Government Bond - Short, make sure to go to www.zacks.com/funds/mutual-funds 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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