Is VFIJX a Strong Bond Fund Right Now?

If you've been stuck searching for Mutual Fund Bond funds, consider Vanguard GNMA Admiral (VFIJX) as a possibility. VFIJX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VFIJX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard GNMA Admiral made its debut in February of 2001 and VFIJX has managed to accumulate roughly $12.71 billion in assets, as of the most recently available information. Brian Conroy is the fund's current manager and has held that role since May of 2019.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of -0.79%, and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -3.37%, 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. VFIJX's standard deviation over the past three years is 4.95% compared to the category average of 10.59%. Over the past 5 years, the standard deviation of the fund is 4.14% compared to the category average of 9.29%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.82, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VFIJX has a negative alpha of -0.85, 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, VFIJX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.77%. Looking at the fund from a cost perspective, VFIJX is actually cheaper than its peers.

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

Bottom Line

Overall, Vanguard GNMA Admiral ( VFIJX ) 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 great potential choice for investors right now.

Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.