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If you're looking for an Investment Grade Bond - Long fund category, then a potential option is Vanguard Long-Term Investment-Grade Income Investor (VWESX - Free Report) . VWESX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
VWESX is part of the Investment Grade Bond - Long section, an area loaded with various investment options. Investment Grade Bond - Long funds focus on the long end of the curve, generally with bonds that mature in more than 10 years. Fixed income instruments with this maturity level usually have high duration risk, but they also compensate investors with a heftier yield, at least when compared to their short maturity counterparts. Lastly, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VWESX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Long-Term Investment-Grade Income Investor made its debut in July of 1973, and since then, VWESX has accumulated about $4 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. VWESX has a 5-year annualized total return of -1.83% and it sits 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 -6.33%, 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. Compared to the category average of 45%, the standard deviation of VWESX over the past three years is 15.62%. Looking at the past 5 years, the fund's standard deviation is 14.02% compared to the category average of -4%. This makes the fund more volatile than its peers over the past half-decade.
VWESX carries a beta of 1.76, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 1.43, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWESX has 28.84% in high quality bonds rated at least 'AA' or higher, while 70.3% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, VWESX is a no load fund. It has an expense ratio of 0.21% compared to the category average of 0%. VWESX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $3,000 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 similar performance, worse downside risk, and higher fees, Vanguard Long-Term Investment-Grade Income Investor ( VWESX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Long area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VWESX too 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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Is VWESX a Strong Bond Fund Right Now?
If you're looking for an Investment Grade Bond - Long fund category, then a potential option is Vanguard Long-Term Investment-Grade Income Investor (VWESX - Free Report) . VWESX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
VWESX is part of the Investment Grade Bond - Long section, an area loaded with various investment options. Investment Grade Bond - Long funds focus on the long end of the curve, generally with bonds that mature in more than 10 years. Fixed income instruments with this maturity level usually have high duration risk, but they also compensate investors with a heftier yield, at least when compared to their short maturity counterparts. Lastly, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
VWESX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard Long-Term Investment-Grade Income Investor made its debut in July of 1973, and since then, VWESX has accumulated about $4 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. VWESX has a 5-year annualized total return of -1.83% and it sits 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 -6.33%, 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. Compared to the category average of 45%, the standard deviation of VWESX over the past three years is 15.62%. Looking at the past 5 years, the fund's standard deviation is 14.02% compared to the category average of -4%. This makes the fund more volatile than its peers over the past half-decade.
VWESX carries a beta of 1.76, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 1.43, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWESX has 28.84% in high quality bonds rated at least 'AA' or higher, while 70.3% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, VWESX is a no load fund. It has an expense ratio of 0.21% compared to the category average of 0%. VWESX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $3,000 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 similar performance, worse downside risk, and higher fees, Vanguard Long-Term Investment-Grade Income Investor ( VWESX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Long area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VWESX too 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.