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Is VFSUX a Strong Bond Fund Right Now?

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·3 min read
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Mutual Fund Bond fund seekers should consider taking a look at Vanguard Short-Term Investment-Grade Admiral (VFSUX). VFSUX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VFSUX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Since Vanguard Short-Term Investment-Grade Admiral made its debut in February of 2001, VFSUX has garnered more than $50.17 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 1.44%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.93%, which places it in the middle 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. Over the past three years, VFSUX's standard deviation comes in at 3.22%, compared to the category average of 10.8%. Over the past 5 years, the standard deviation of the fund is 2.57% compared to the category average of 9.49%. This makes the fund less volatile than its peers over the past half-decade.

VFSUX carries a beta of 0.44, 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 0.31, 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, VFSUX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.68%. From a cost perspective, VFSUX is actually cheaper than its peers.

This fund requires a minimum initial investment of $50,000, and each subsequent investment should be at least $1.

Bottom Line

Overall, Vanguard Short-Term Investment-Grade Admiral ( VFSUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on VFSUXin the Mutual Fund Bond category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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