Is VAIPX a Strong Bond Fund Right Now?

There are plenty of choices in the Government - Bonds: Misc category, but where should you start your research? Well, one fund that may not be worth investigating is Vanguard Inflation-Protected Securites Admiral (VAIPX). VAIPX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

VAIPX is one of many Government - Bonds: Misc funds to choose from. In their portfolios, Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VAIPX. Vanguard Inflation-Protected Securites Admiral made its debut in June of 2005, and since then, VAIPX has accumulated about $13.61 billion in assets, per the most up-to-date date available. The fund's current manager, John Madziyire, has been in charge of the fund since November of 2021.

Performance

Investors naturally seek funds with strong performance. VAIPX has a 5-year annualized total return of 1.78% and is in the bottom 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 0.71%, 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. VAIPX's standard deviation over the past three years is 7.03% compared to the category average of 11.46%. Over the past 5 years, the standard deviation of the fund is 6.14% compared to the category average of 11.16%. This makes the fund less volatile than its peers over the past half-decade.

VAIPX carries a beta of 0.6, 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 1.94, 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, VAIPX is a no load fund. It has an expense ratio of 0.10% compared to the category average of 0.82%. VAIPX is actually cheaper than its peers when you consider factors like cost.

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

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

Bottom Line

Overall, even with its comparatively weak performance, better downside risk, and lower fees, Vanguard Inflation-Protected Securites Admiral ( VAIPX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.

Don't stop here for your research on Government - Bonds: Misc funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VAIPX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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