Is VTABX a Strong Bond Fund Right Now?
If you have been looking for International Bond - Developed funds, a place to start could be Vanguard Total International Bond Index Admiral (VTABX). VTABX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VTABX is one of many International Bond - Developed funds to choose from. International Bond - Developed funds offer investors geographic diversification by focusing on fixed income securities from developed nations besides the United States. Top holdings include assets from countries like Japan, Germany, the UK, France, and Australia. While these is certainly an advantage, investors should be aware of currency risk.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VTABX. The Vanguard Total International Bond Index Admiral made its debut in May of 2013 and VTABX has managed to accumulate roughly $51.77 billion in assets, as of the most recently available information. The fund is currently managed by Joshua Barrickman who has been in charge of the fund since May of 2013.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.34%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.12%, which places it in the top 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. Compared to the category average of 10.73%, the standard deviation of VTABX over the past three years is 3.07%. Over the past 5 years, the standard deviation of the fund is 2.93% compared to the category average of 9.34%. This makes the fund less volatile than its peers over the past half-decade.
VTABX carries a beta of 0.69, 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 0.97, which measures performance on a risk-adjusted basis.
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, VTABX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.96%. Looking at the fund from a cost perspective, VTABX 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.
Bottom Line
Overall, Vanguard Total International Bond Index Admiral ( VTABX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Vanguard Total International Bond Index Admiral ( VTABX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the International Bond - Developed, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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