I am trying to resolve why GNMA mutual fund yields have so much variance from fund to fund. I own both Vanguard VFIIX and Fidelity FGMNX Ginnie Mae mutual funds in two different retirement accounts. Here is the data as reported by Yahoo Finance (& Morningstar) for the same day Friday, February 17, 2012 using data from the previous month end, as of January 31, 2012.
YTD Return 0.43%
Annual Yield 3.15%
5yr average Return 6.93%
Annual expense ratio (net) 0.23%
YTD Return 0.39%
Annual Yield 3.12%
5yr average Return 7.24%
Annual expense ratio (net) 0.45%
I have highlighted in bold, the superior yield reported for each time period. Note that Vanguard reports higher short term yield, but Fidelity reports higher long term (5yr) yield. Also note that both yield and total return are calculated after expenses are deducted.
Without going into detailed analysis of each funds holdings and average maturities, I attribute the shift in yield differences between these two funds to a slight change in investment strategy effecting average maturities of the holdings over the past five years. I conclude that Vanguard has lengthened average maturities, improving current yields.