4 / 5 Stars
5 5 3 5 2
Zacks Investment Research
5 (Strong Sell)
Standard & Poor's
4 / 5 Stars
#86 in Intermediate-Term Bond
U.S. News evaluated 320 Intermediate-Term Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 6.09 percent over the past year, 8.20 percent over the past three years, 7.56 percent over the past five years, and 6.09 percent over the past decade.
|Trailing Returns||Updated 04.30.2013|
|Year to date||1.6%|
|3 Years (Annualized)||8.2%|
|5 Years (Annualized)||7.6%|
|10 Years (Annualized)||6.1%|
The Vanguard Intermediate-Term Bond Index Fund is a straightforward--and low-cost--fund covering the fixed-income market.
As of May 03, 2013, the fund has assets totaling almost $17.40 billion invested in 1,421 different holdings. Its portfolio consists primarily of treasuries and corporate bonds.
The Vanguard Intermediate-Term Bond Index Fund looks to mirror the returns of its benchmark, the Barclays Capital U.S. 5-10 Year Government/Credit Float Adjusted Index. As its name implies, the benchmark index maintains a large allocation to treasuries. Notably, as of the end of the first quarter, more than half of this fund's portfolio was tucked away in government debt.
Going forward, one concern is the fund's interest rate risk. Many funds have been dialing down their average duration in anticipation of higher interest rates, but this fund keeps its duration numbers tied to those of its index. That could make the pain harder to absorb once rates start moving higher. The fund has returned 6.09 percent over the past year and 8.20 percent over the past three years.
Historically, the fund has bonded quite well with its benchmark. It has also made a strong case for the use of indexing. As of the end of the first quarter, the fund's trailing 15-year returns landed it in the top 8 percent of Morningstar's intermediate-term bond category. Over time, the fund's low expense ratio has been a major contributor to its performance. The fund has returned 7.56 percent over the past five years and 6.09 percent over the past decade.
The fund looks to replicate the returns of the Barclays Capital U.S. 5-10 Year Government/Credit Float Adjusted Index. To do so, management runs a highly diversified portfolio that contains upward of 1,000 securities. Since owning all the securities in the index would prove unwieldy, management must engage in "sampling." That means that while this is technically an index fund, management makes some of the buy and sell decisions typically ascribed to active managers.
Role in Portfolio
Morningstar calls this fund a "core" holding.
Ken Volpert has been with the fund since its 1994 launch. Joshua Barrickman has co-managed the portfolio since April 2008.
Vanguard Intermediate-Term Bond Index has an expense ratio of 0.20 percent.
The fund is susceptible to the same risks as those that its benchmark faces. Going forward, one of the main risks is the potential for higher interest rates.