Vanguard Short-Term Treasury Fund (VFISX) Investor Shares

Vanguard Short-Term Treasury Fund (VFISX) is another popular taxable bond mutual fund. This investor shares fund focuses its assets in short term maturity government bonds.

Vanguard Short-Term Treasury Fund (Ticker: VFISX)

The Vanguard Short-Term Treasury fund objective is to seek current income while maintaining limited price volatility. The mutual fund invests majority assets (>80%) in U.S. Treasury securities. It may invest in bills, bonds, and notes issued by the U.S. Treasury. It will maintain a dollar-weighted average maturity of 1 to 4 years.

Fund Details

• Fund Inception Date: 10/27/1991
• Ticker Symbol: VFISX
• CUSIP: 922031703
• Beta (3yr): 0.45
• Rank in category (YTD): 68%
• Category: Short Government
• Distribution: 0.54%
• Capital Gains: 0%
• Expense Ratio: 0.20%
• Net Assets: $ 6.50 billion
• Number of Years Up: 19 years
• Number of Years Down: 1 year
• Annual Turnover Rate: 302%

Updated on 12/7/2012

This Vanguard fund was first introduced to public market in October 1991. It is managed by David R. Glocke. Mr. Glocke is the principal and portfolio manager with Vanguard group. The fund’s expense ratio is only 0.20%. This fee is lower than the category average which is 0.88%. As a no-load fund, there is no management fee and no sales charge fee. The total net assets are $6.50 billion. The annual holdings turnover as per September 27, 2012 is quite high (302.00%).

More: Top Intermediate Term Bond ETFs

Morningstar analysts rated this short government mutual fund with 3-stars and Silver rating. The YTD return of this Vanguard fund is 0.61%. The best 1-year total return was recorded in 2000 with 8.83%. The only year it has return in negative return was in 2004 with 1.03%. Barclays US 1-5 Year Treasury Index is the fund’s benchmark. Based on the load adjusted return, the performance of this fund is as below:

• 1-year: 0.72%
• 3-year: 1.92%
• 5-year: 3.44%
• 10-year: 3.23%

Investors, who are interested in this fund, can open a brokerage account with minimum initial investment of $3,000. The minimum subsequent investment is $100. This bond fund is available for purchase through 96 brokerages, such as JP Morgan, Ameriprise Brokerage, Scottrade Load, EP Fee Small, T Rowe Price, Schwab Retail, Raymond James, etc. The other class of this fund is Admiral Shares (VFIRX).

As of August 2012, the distribution by issuer is Treasury/ Agency (94.9%), Government Mortgage-Backed (4.8%) and Short-Term Reserves (0.3%).

Investing in fixed income mutual fund involves risks. According to the fund’s website, the risks include income risk, interest rate risk, manager risk, etc.

Disclosure: No Position

Other taxable bond mutual funds:

• Best Long Government Bond Mutual Funds