Looking at Vanguard Total Bond Market
Index Fund Admiral Shares (VBTLX)
Recently, we’ve been taking a walk through various mutual funds and telling you the pros and cons of each. Today, we’ll be looking at another mutual fund you might have heard of, the Vanguard Total Bond Market Index Fund Admiral Shares, also known by the letters VBTLX. Let’s dive in.
The Focus of This Mutual Fund
VBTLX was created in order to give investors a broader exposure to certain investment-grade bonds in the United States. This fund invests in solid securities, such as those which are mortgage-backed of all kinds, including short, intermediate, and long-term securities, as well as in U.S. Treasuries.
Investing in VBTLX could bring a risk, however, due to interest rates increasing within the mortgage market. If that happens, bond prices will decrease within the portfolio, which brings the net asset value of the entire fund lower overall. Investing here could bring some losses, so be aware and go into this fund with your eyes wide open. Since this fund follows mortgage-backed securities, the share price could ebb and flow within a wide margin as it follows along with the stock market at large.
VBTLX invests in several varying maturities within the fixed income market which makes this particular mutual fund a solid investment despite its risk of losses and gains. Investors in this fund are encouraged to make VBTLX their core bond holding.
This mutual fund has an inception date of 11/12/2001, which means this fund has been around the block a few times. The expense ratio is only 0.05%, and the minimum investment price, whether simply investing or opening an IRA, is $3000. However, there is no purchase fee, no redemption fee, and no 12b-1 fee. VBTLX is also available as an EFT.
Some of the holdings of VBTLX include AbbVie, a pharmaceutical and research company, Amazon.com, American Express, Freddie Mac, Digital Realty Trust, and Hyatt Hotels just to name a few. Larger companies as well as smaller ones make up the overall holdings of VBTLX, which is why this particular fund has the potential to swing one way or the other when it comes to share price.
Backed by Vanguard
If you are knowledgeable about investing, you’ll know Vanguard is one of the most trusted names in the business. They hold countless retirement accounts such as 401k’s and IRAs and have become a household name within the investment world. VBTLX is managed by the Vanguard Fixed Income Group, which has over twenty three years of experience in fund management.
At the end of June, 2022, VBTLX logged an impressive $100.1 billion dollars in net assets, with their total net assets a cool $281.6 billion dollars. The good news? This fund is open to new investors and makes an attractive choice for anyone who wants to feel out a mutual fund that specializes in bond holding. If you’re in it for the long haul and don’t mind deep fluctuations of the everyday stock market, VBTLX might just be for you.
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