In This Article:
There are plenty of choices in the Government Mortgage - Intermediate category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard GNMA Admiral (VFIJX). VFIJX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify VFIJX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VFIJX. Vanguard GNMA Admiral debuted in February of 2001. Since then, VFIJX has accumulated assets of about $9.13 billion, according to the most recently available information. Brian Conroy is the fund's current manager and has held that role since May of 2019.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of -0.48%, and it sits in the top 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 0.72%, which places it in the top 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. VFIJX's standard deviation over the past three years is 7.98% compared to the category average of 10.78%. The standard deviation of the fund over the past 5 years is 6.3% compared to the category average of 10.54%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 1.02, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VFIJX has a negative alpha of -0.21, 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, VFIJX is a no load fund. It has an expense ratio of 0.11% compared to the category average of 0.76%. From a cost perspective, VFIJX is actually cheaper than its peers.