For those considering an investment in bond index funds, Vanguard funds are one of the best choices out there. The company is known for its low expense ratios, which have been shown to be the most important factor in long-term fund performance. It is especially true with respect to bond funds—more so than with stock funds—due to their lower expected returns, and it’s even more important when a low-yield environment restricts bonds’ total return potential. Here’s a list of Vanguard’s funds, along with their Morningstar rankings where applicable.
Vanguard Mutual Funds
California Intermediate-Term Tax-Exempt (VCAIX) 4-star California Long-Term Tax-Exempt (VCITX) 4-star GNMA (VFIIX) 4-star High-Yield Corporate (VWEHX) 4-star High Yield Tax Exempt (VWAHX) 4-star Inflation-Protected Securities (VIPSX) 4-star Intermediate-Term Bond Index Admiral Shares (VBILX) 5-star Intermediate-Term Corporate Bond Index Admiral Shares (VICSX) 4-star Intermediate-Term Treasury Bond Index Admiral Shares (VSIGX) 4-star Intermediate-Term Investment-Grade (VFICX) 2-star Intermediate-Term Tax-Exempt (VWITX) 4-star Intermediate-Term Treasury (VFITX) 4-star Limited-Term Tax-Exempt (VMLTX) 4-star Long-Term Corporate Bond Index Admiral Shares (VLTCX) 3-star Long-Term Treasury Bond Index Admiral Shares (VLGSX) 3-star Long-Term Investment-Grade (VWESX) 4-star Long-Term Tax-Exempt (VWLTX) 4-star Long-Term Treasury (VUSTX) 3-star Massachusetts Tax-Exempt (VMATX) 5-star Mortgage-Backed Securities Admiral Shares (VMBSX) 3-star New Jersey Long-Term Tax-Exempt (VNJTX) 4-star New York Long-Term Tax-Exempt (VNYTX) 4-star Ohio Long-Term Tax-Exempt (VOHIX) 5-star Pennsylvania Long-Term Tax-Exempt (VPAIX) 5-star Short-Term Bond Index Admiral Shares (VBIRX) 3-star Short-Term Government Bond Index Admiral Shares (VSBSX) 3-star Short-Term Federal (VSGBX) 4-star Short-Term Inflation-Protected Securities Admiral Shares (VTAPX) 2-star Short-Term Investment-Grade (VFSTX) 4-star Short-Term Tax-Exempt (VWSTX) 3-star Short-Term Treasury (VFISX) 4-star Total Bond Market Index Admiral Shares (VBTLX) 3-star
Vanguard Exchange-Traded Funds
Extended Duration Treasury (EDV) 5-star Intermediate-Term Bond (BIV) 5-star Intermediate-Term Treasury Bond (VGIT) 4-star Long-Term Bond (BLV) 3-star Long-Term Government Bond (VGLT) 3-star Mortgage-Backed Securities (VMBS) 3-star Short-Term Bond (BSV) 3-star Short-Term Government Bond (VGSH) 3-star Total Bond Market (BND) 3-star
A Word of Warning
Keep in mind that index funds—Vanguard’s specialty—might not necessarily be the answer. Bond index funds represent a fairly narrow swath of the total global bond market, and they tend to have a high sensitivity to moves in prevailing yields. Still, Vanguard is the leader in the mutual fund business for a reason. In an article titled, “Why Vanguard is a Role Model for the Fund Industry,” MarketWatch’s Chuck Jaffee writes: “At the risk of sounding like a commercial for the Valley Forge, Pa. based giant—which controls well over $3 trillion in assets worldwide—the question is, ‘Why invest anywhere else?’…Vanguard has earned its position as the fund industry’s big dog with a relentless focus on costs and common sense, and a dedication to reaching long-term success without obsessive interest in topping the market over the short run…‘Why not Vanguard?’ is an appropriate test before buying a fund from any of the competition.“ Disclaimer: The information on this site is provided for discussion purposes only and should not be construed as investment advice. Under no circumstances does this information represent a recommendation to buy or sell securities. Always talk to a financial and/or tax advisor before you invest.
