Vanguard Intermediate Term Investment Grade Fund (VFICX)

Vanguard Intermediate-Term Investment-Grade fund is considered as one of the top rated taxable bond mutual fund. This Vanguard fund invests in US bond market. This intermediate term bond fund invests in a diversified portfolio of debt securities. This Vanguard fund is actively managed and has low expense ratio.

Details about this fund can be found below. You can also fund other best rated fund in my MEPB Financial website.

Vanguard Intermediate-Term Investment-Grade Investor (VFICX)

This Vanguard Intermediate-Term Investment-Grade fund (investor class) seeks to provide a moderate and sustainable level of current income. This Vanguard fund invests in a variety of high-quality and, to a lesser extent, medium-quality fixed income securities, <80% of which will be short- and intermediate-term investment-grade securities. This bond fund will keep a dollar-weighted average maturity of 5 to 10 years.

Fund Details

• Fund Inception Date: November 1, 1993
• Ticker Symbol: VFICX
• CUSIP: 922031885
• Beta (3yr): 1.35
• Rank in category (YTD): 8%
• Category: Intermediate-Term Bond
• Distribution Rate / Yield: 2.77%
• Capital Gains: 0%
• Expense Ratio: 0.20%  
• Net Assets: $27.2 billion
• Number of Years Up: 14 years
• Number of Years Down: 3 years
• Average Duration: 5.4 years
• Average Maturity: 6.6 years
• Annual Turnover Rate: 68.0%

Updated May 2017

Gregory S. Nassour is the current fund’s manager. He is the principal manager of Vanguard. He has been managing this fund since May 2008. The fund’s inception date was November 1993. The fund dividend yield is 4.29%. The distributions are scheduled monthly. The recent distribution on October 31, 2011 is $0.03579. The last capital gain paid in March 2011 was $0.002 for short-term capital gain and $0.083 for long term capital gain. The expense ratio of this fund is 0.22% per year. The annual holdings turnover rate is 39.0% (lower than the average in the Intermediate-Term Bond category which is 188.24%. The fund total net assets are $15.11 billion.

This VFICX fund has 4-stars rating from Morningstar. This best rated bond fund has 14 years of positive return record with the best achievement in 2009 (17.73%). The fund has 5.57% YTD return. Based on the load adjusted return, this fund has returned 11.06% over the past three years and 6.77% over the past five years. The average maturity is 6.6 years and the average duration is 5.4 years.

• Year 2017: 2.28% (YTD)
• Year 2016: 3.83%
• Year 2015: 1.53%
• Year 2014: 5.80%
• Year 2013: -1.37%

To open a brokerage account of this Vanguard fund, investor will need a minimum of $3,000 for the initial investment and $100 for the next subsequent investment. Same amount applies for IRA account. Investor can purchased this fund from 81 brokerages. The other class of this top fund is Vanguard Intermediate-Term Investment-Grade Admiral Shares (VFIDX). There is no 12b1 fee for investing in this fund and there is no front-end sales load fee.

As of September 2011, this VFICX fund has a total of 1239 total bonds. The fund’s benchmarks are Barclays Capital U.S. 5-10 Year Credit Bond Index and Barclays Capital U.S. Aggregate Bond Index. The distribution by issuer is Industrial (37.9%), Finance (32.2%), Asset-Backed (6.7%), Treasury/ Agency (6.7%), Utilities (6.5%), Commercial Mortgage-Backed (4.8%), Short-Term Reserves (3.0%), Foreign (1.7%), and other (0.5%).

Investing in this fund involves primary investment risks such as Credit risk, Income risk, Interest rate risk, management risk, etc.

Pros:

• It has a low expense ratio fee
• Good long term performance

Disclosure: No Position

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• PIMCO Income Fund (PONAX)