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Is VCORX a Strong Bond Fund Right Now?

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  • VCORX

Having trouble finding an Investment Grade Bond - Intermediate fund? Vanguard Core Bond Investor (VCORX) is a potential starting point. VCORX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

VCORX is one of many Investment Grade Bond - Intermediate funds to pick from. Investment Grade Bond - Intermediate funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. Fixed income instruments with this maturity level usually have medium duration risk, but they also compensate investors with a modest yield, at least when compared to their short maturity counterparts. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.

History of Fund/Manager

Vanguard Group is responsible for VCORX, and the company is based out of Malvern, PA. Vanguard Core Bond Investor debuted in March of 2016. Since then, VCORX has accumulated assets of about $252.97 million, according to the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. VCORX has a 5-year annualized total return of 3.68% But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.45%, 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. VCORX's standard deviation over the past three years is 3.82% compared to the category average of 9.23%. The standard deviation of the fund over the past 5 years is 3.56% compared to the category average of 7.94%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.08, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, VCORX has a positive alpha of 0.42, which measures performance on a risk-adjusted basis.

Ratings

Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VCORX has 38.67% in high quality bonds rated at least 'AA' or higher, while 38.64% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.

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, VCORX is a no load fund. It has an expense ratio of 0.25% compared to the category average of 0.79%. So, VCORX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Core Bond Investor ( VCORX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively


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