Short-Term Investment-Grade Fund Admiral Shares (VFSUX)

OPTIONS as of
05/24/2018

Options Expense ratio Minimum
Admiral 0.10% N/A
Investor 0.20% N/A
Inst 0.07% $5.0 Million

About our options  


 

Fees

A fee charged by some mutual funds when an investor buys shares. This fee is not a sales charge or load because it is paid directly to the fund to offset the costs of trading certain securities.

 None

A fee charged by some mutual funds when an investor sells shares. A redemption fee differs from a back-end load because the money is paid back into the fund. Many funds charge redemption fees only when shares are bought and then sold within a specific period of time, generally in an effort to discourage market-timing and short-term trading. Some brokers also charge their clients redemption fees for the sale of securities.

 None

KEY FACTS

Product type: Short-Term Bond
VFSUX
 inception on 02/12/2001
Earliest share class inception on 10/29/1982
$57.8 billion

This represents the total net assets for all share classes of Vanguard's U.S. funds, as well as any collective trust that shares the same investment strategy, management and holdings.

 as of 12/31/2018
$40.0 billion net assets for
VFSUX
 as of 12/31/2018
1,829 holdings as of 12/31/2018
Benchmarked to the BloomBarc US 1-5 Year Credit Index (LD18TRUU)
Turnover rate (Fiscal year-end  01/31/2018) 86.30%
CUSIP: 922031836

STYLEBOX

Bond
Portfolio of high-quality, short-term corporate bonds.



Central tendency
Expected range

How to read our stylebox  

Investment approach



  • Short-term, investment-grade fixed income securities.
  • Seeks current income with limited price volatility.
  • At least 80% invested in short-term and intermediate-term investment-grade fixed income securities, primarily corporate bonds; invests primarily in high-quality (investment-grade) corporate bonds.
  • Approach focused on intensive credit analysis and risk control.
  • Lower interest rate volatility than the broad U.S. fixed income market.

Total returns

as of 12/31/2018

View as:

as of 12/31/2018

4%
3
2
1
0%
 
 
 
 
 
  1 year 3 year 5 year 10 year

02/12/2001

NAV 
0.96% 1.97% 1.78% 3.55% 3.47%

Bloomberg Barclays U.S. 1-5 Year Credit Bond Index

*
1.11% 2.00% 1.80% 3.72%

Note: Fee adjusted for mutual funds where applicable.

* Includes investment-grade (rated Baa3 or above by Moody’s) corporate and international dollar-denominated bonds with maturities of 1 to 5 years.

The performance data shown represent past performance, which is not a guarantee of future results. Investment returns and principal value will fluctuate, so investors' shares, when sold, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data cited.


People and process

Product management

Vanguard Short-Term Investment-Grade Fund seeks to provide current income with limited price volatility, and aggregate performance consistent with short-term, investment-grade fixed income securities. The fund invests primarily in short-term corporate bonds, but generally has some exposure to intermediate-term corporate obligations. At least 80% of assets are invested in short-term and intermediate-term, investment-grade fixed income securities, primarily corporate bonds, and 95% invested in investment-grade securities rated Baa or higher. The fund maintains a weighted average maturity of 1–4 years. Vanguard Fixed Income Group, the fund’s advisor, emphasizes sectors and securities that represent good relative value, while modestly adjusting portfolio duration to reflect the near-term interest rate outlook, shape of the yield curve, and other factors.

Firm and manager details  

Distribution by credit quality(% of fund) as of 12/31/2018

  Credit rating  VFSUX
U.S. Government 9.7%
Aaa 23.0%
Aa 14.6%
A 30.2%
Baa 18.9%
Ba 1.6%
B 0.2%
Caa 0.0%
Ca 0.0%
C 0.0%
Not Rated 1.8%
0%
35%
Total 100.0%
* Credit-quality ratings are measured on a scale that generally ranges from AAA (highest) to D (lowest). ”NR” is used to classify securities for which a rating is not available. NR securities may include a fund’s investment in Vanguard Market Liquidity Fund or Vanguard Municipal Cash Management Fund, each of which invests in high-quality money market instruments and may serve as a cash management vehicle for the Vanguard funds, trusts, and accounts. U.S. Treasury, U.S. Agency, and U.S. Agency mortgage-backed securities appear under ”U.S. Government.” Credit-quality ratings for each issue are obtained from Barclays using ratings derived from Moody’s Investors Service (Moody’s), Fitch Ratings (Fitch), and Standard & Poor’s (S&P). When ratings from all three agencies are available, the median rating is used. When ratings are available from two of the agencies, the lower rating is used. When one rating is available, that rating is used.

Fundamentals

Bond
as of 12/31/2018
VFSUX

Bloomberg Barclays U.S. 1-5 Year Credit Bond Index

Number of bonds 1,829 2,539
Yield to maturity 3.45% 3.43%
Short-term reserves 1.51% N/A
Average duration 2.4 (years) 2.6 (years)

Average effective maturity (taxable bond funds and balanced funds except Tax-Managed Balanced)
Average Effective Maturity is defined as the average length of time until fixed income securities held by a fund reach maturity and are repaid, taking into consideration that an action such as a call or refunding may cause some bonds to be repaid before they mature.

Average stated maturity (municipal bond funds and Tax-Managed Balanced)
Average stated maturity represents the average of the stated maturity dates for all fixed income securities held by the fund.

Average maturity (money market funds only)
Average maturity represents the weighted average maturity of the fund's holdings using the date of the next interest rate adjustment for certain adjustable-rate securities held by the fund.

3.0 (years) 2.8 (years)
Average coupon 1.55% 3.18%

Risk and volatility as of 12/31/2018

  VFSUX

Bloomberg Barclays U.S. 1-5 Year Credit Bond Index

R-squared N/A 0.96
Beta N/A 0.89
Alpha 0.00 N/A
Standard deviation 1.24% 1.37%
Sharpe ratio 0.71 0.74

Risk and volatility are based on the share class with the earliest inception date.

Risk measures are calculated from trailing 36-month fund returns relative to the associated benchmarks.

The fund is designed for investors with a low tolerance for risk; however, the fund’s performance could be hurt by:

  • Income risk: The chance that the fund’s income will decline because of falling interest rates.
  • Interest rate risk: The chance that bond prices will decline because of rising interest rates. Interest rate risk should be low for the fund because it invests primarily in short-term bonds, whose prices are much less sensitive to interest rate changes than are the prices of longer term bonds.
  • Credit risk: The chance that a bond issuer will fail to pay interest or principal in a timely manner or that negative perceptions of the issuer’s ability to make such payments will cause the price of that bond to decline. Credit risk should be relatively low for the fund because it invests primarily in bonds that are considered to be of high quality.
  • Call risk: The chance that during periods of falling interest rates, issuers of callable bonds may call (redeem) securities with higher coupon rates or interest rates before their maturity dates. The fund would then lose any price appreciation above the bond’s call price and would be forced to reinvest the unanticipated proceeds at lower interest rates, resulting in a decline in the fund’s income.
  • Extension risk: The chance that during periods of rising interest rates, certain debt obligations will be paid off substantially more slowly than originally anticipated, and the value of those securities may fall. Extension risk is generally low for short-term bond funds.
  • Liquidity risk: The chance that the fund may not be able to sell a security in a timely manner at a desired price. Liquidity risk is generally low for short-term bond funds.
  • Manager risk: The chance that poor security selection will cause the fund to underperform relevant benchmarks or other funds with a similar investment objective.