Is VUSTX a Strong Bond Fund Right Now?
If you're looking for a Government Bond - Long fund category, then a potential option is Vanguard Long-Term Treasury Investor (VUSTX). VUSTX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
VUSTX is part of the Government Bond - Long section, a segment that boasts an array of possible selections. Government Bond - Long funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category focuses on the long end of the curve, and that results in higher yields, but greater sensitivity to interest rate fluctuations, too.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VUSTX. The Vanguard Long-Term Treasury Investor made its debut in May of 1986 and VUSTX has managed to accumulate roughly $577.58 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -8.37%, 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 -4.83%, 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.
Advertisement: High Yield Savings Offers
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, VUSTX's standard deviation comes in at 15.32%, compared to the category average of 15.04%. Over the past 5 years, the standard deviation of the fund is 13.98% compared to the category average of 14.03%. This makes the fund less volatile than its peers over the past half-decade.
VUSTX carries a beta of 2.18, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -3.75, 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, VUSTX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.63%. VUSTX is actually cheaper than its peers when you consider factors like cost.