Since 1980, The VFIIX has annually earned investors 7.08% while not owning any equities. Nevertheless, these funds expose investors to dangers that include inflation and refinance risk. Ginnie Maes are pass-through securities. Performance. How ETFdb.com has selected ETF alternatives to VFIIX: The mutual fund VFIIX has been benchmarked by Vanguard against an index, Barclays Capital U.S. GNMA Index, in its fund … © Copyright 2020 Hearst Communications, Inc. The "average duration" figure published by a bond fund tells you how much the fund's share price will change with a 1-percent change in interest rates. Ginnie Mae returns are outstanding when compared to other government bonds. Variable Annuity Alternatives for Retired People, Annuity Vs. Other Guaranteed-Income Investments. When this happens, you get a return of principal but lose income. Investors picking up mortgage-backed securities can get government guaranteed safety by sticking with MBS guaranteed by either the Government National Mortgage Association or the Federal National Mortgage Association. Money Market Funds. But there are still risks associated with them. Vanguard GNMA recently lost a veteran manager, but its thoughtful and risk-aware approach to the agency mortgage market hasn’t changed. See risk data for Vanguard GNMA Fund (VFIIX). Analyze the Fund Fidelity ® GNMA Fund having Symbol FGMNX for type mutual-funds and perform research on other mutual funds. NYSE and AMEX data is at least 20 minutes delayed. VFIIX | A complete Vanguard GNMA Fund;Investor mutual fund overview by MarketWatch. Focused on government-guaranteed GNMA securities. The U.S. government guarantees the payment of interest and principal from Ginnie Mae bonds. Vanguard GNMA Fund: This fund VFIIX, invests in mortgage-backed securities that are guaranteed by the U.S. government. Critics of mortgage-backed securities argue that investors have little idea what kinds of loans these sometimes complex securities contain. Mortgages within GNMA bond funds have similar durations and interest rates. This pair targets the safer types of mortgages. For example, one large GNMA fund quotes a current duration of 3.2 years. GNMA Funds Average Š -0.10 3.11 3.38 2.91 2.20 2.29 The performance data shown represent past performance, which is not a guarantee of future results. GNMA securities are backed by the same full faith and credit guarantee offered by U.S. Treasury securities, yet typically provide higher yields to compensate for prepayment risk – the risk that … These loans are sorted by interest rates and proper… Consequently, GNMA bonds expose you to the risks of inflation and a loss of spending power. Using state-of-the-art metrics, top rating services also compare the performance of GNMA funds to other safe and secure investments, such as U.S. Treasury options. With long-term interest rates now back near historic lows, what is the outlook for GNMA bonds? In a rising rate environment, GNMA fund holders will see their share values fall, and the funds will take longer to be able to pay the higher rates of the current bond market. The fund ranks in its category’s top quintile over each time period. This effect is especially damaging to investors who are taking their fund dividends in cash and see their principal value declining. The fund normally invests at least 80% of net assets in Ginnie Maes, which carry the same "full faith and credit" guarantee of the U.S. government as do U.S. Treasuries. Most of the rest is in other agency-backed securities, including those of Fannie Mae and Freddie Mac, which have implicit U.S. backing. How Does Mortgage Bond Trading Affect Rates? Vanguard GNMA … See performance data and interactive charts for Vanguard GNMA Fund (VFIIX). 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