Vanguard Intermediate-Term Bond Index Fund (VBIIX)

As one of the largest mutual funds family, Vanguard offers variety of index funds. There are several benefit in investing in Vanguard funds such as they provide lower fees, they are easy to access from brokerage or Vanguard brokerage, they provide instant portfolio diversification. Vanguard funds also rank among the best fund in various categories like bonds or equities. The Vanguard Intermediate-Term Bond Index is one of the best bond fund offered by Vanguard. This fund is passively managed and offers lower expense ratio fee. You can find the details about this fund below.

Vanguard Intermediate-Term Bond Index Inv (VBIIX)

Vanguard VBIIX fund details

The Vanguard Intermediate-Term Bond Index fund is seeking to track the performance of a market-weighted bond index with an intermediate-term dollar-weighted average maturity. The fund uses a passive management investment approach to track the performance of the Barclays Capital U.S. 5-10 Year Government/ Credit Float Adjusted Index. The fund invests most of assets (>80%) in bonds held in the index. The fund maintains a dollar-weighted average maturity consistent with that of the index, between 5 and 10 years.

VBIIX Fund Details

• Fund Inception Date: March 1994
• Ticker Symbol: VBIIX (Investor Class)
• CUSIP: 921937306
• Beta: 1.66
• Rank in category: 20
• Category: Intermediate-Term Bond
• Yield: 3.78%
• Turnover Rate: 46%
• Number of Years Up: 15 year
• Number of Years Down: 1 year
• Number of bonds: 1140
• Average maturity: 7.3 years
• Average duration: 6.3 years
• Net assets: $11.7 billion
• Average Coupon: 4.7%

updated on 6/7/2011

VBIIX fund is passively managed by Joshua C. Barrickman since April 2008. This Vanguard Intermediate-Term Bond Fund has 0.22% annual expense rate, lower than the average (0.94%). For investors or traders who are interested to invest in this fund, this no load fund doesn’t have any management fee and sales load fee. The minimum balance to invest in this fund is $3,000 for brokerage and IRA accounts. For the subsequent investment in either account, you will need $100 minimum investment. There are 77 brokerages where we can purchase this fund, including JP Morgan, Schwab Retail, Fidelity Retail Funds Network, Firstrade, T Rowe Price, Td Ameritrade Inc, ADP Access OFA, etc.

The performance of this fund has been great with 15 years of positive return and only 1 year of negative return. Morningstar has rated 4 stars rating for this Index fund. The 1-year load adjusted returns is 8.40%. For 2011, the year-to-date return of this fund is 4.06%. The best 1-year total return so far was achieved in 2000 with 12.78%. As of April 2011, the fund net asset is $11.7 billion. This VBIIX is investor class, and the other classes of this fund are VBILX (Admin), VBIMX (Institutional) and VIBSX (Signal).

This best bond fund has holding turnover of 46%, which is quite low compared to the average holding turnover in the category which is 195.97%. As of April 2011, VBIIX distribution by issuer is 54.7% in treasury/ agency, 20.3% in industrial, 14.3% in finance, 6.3% in foreign, 4.3% in utilities, and 0.1% in government mortgage-backed. The fund’s benchmarks are Barclays Capital U.S. Aggregate Bond Index and Spliced Barclays Capital U.S. 5-10 Year Government/ Credit Float Adjusted Index. 

Per fund's prospectus, the investment risk:

• Interest rate risk
• Income risk
• Credit risk
• Index sampling risk

Disclosure: No Position

Other taxable bond fund article:

• PIMCO Investment Grade Corporate Bond A (PBDAX)
• Dodge & Cox Income fund (DODIX)