Is Vanguard Total Bond Market Index Admiral (VBTLX) a Strong Mutual Fund Pick Right Now?

If you're looking for a Index fund category, then a possible option is Vanguard Total Bond Market Index Admiral (VBTLX). While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

History of Fund/Manager

VBTLX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard Total Bond Market Index Admiral made its debut in November of 2001, and since then, VBTLX has accumulated about $104.59 billion in assets, per the most up-to-date date available. Joshua Barrickman is the fund's current manager and has held that role since February of 2013.

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 0.36%, 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 5.08%, 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, VBTLX's standard deviation comes in at 5.56%, compared to the category average of 9.57%. Over the past 5 years, the standard deviation of the fund is 6.23% compared to the category average of 11.23%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.99, the fund is likely to be as volatile as the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. VBTLX's 5-year performance has produced a negative alpha of -0.09, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VBTLX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.84%. Looking at the fund from a cost perspective, VBTLX is actually cheaper than its peers.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

This could just be the start of your research on VBTLX in the Index 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. 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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This article originally published on Zacks Investment Research (zacks.com).

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