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There are plenty of choices in the Muni - Bonds category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard High-Yield Tax-Exempt Investor (VWAHX - Free Report) . VWAHX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VWAHX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
Vanguard Group is responsible for VWAHX, and the company is based out of Malvern, PA. The Vanguard High-Yield Tax-Exempt Investor made its debut in December of 1978 and VWAHX has managed to accumulate roughly $2.32 billion in assets, as of the most recently available information. The fund's current manager, Mathew Kiselak, has been in charge of the fund since July of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWAHX has a 5-year annualized total return of 4.87% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 6.06%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VWAHX's standard deviation over the past three years is 5.57% compared to the category average of 10.11%. The fund's standard deviation over the past 5 years is 5.1% compared to the category average of 8.64%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.76, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VWAHX has a positive alpha of 0.35, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWAHX has 26.63% in high quality bonds rated at least 'AA' or higher, while 68.97% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VWAHX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.81%. Looking at the fund from a cost perspective, VWAHX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VWAHXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is VWAHX a Strong Bond Fund Right Now?
There are plenty of choices in the Muni - Bonds category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard High-Yield Tax-Exempt Investor (VWAHX - Free Report) . VWAHX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify VWAHX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
Vanguard Group is responsible for VWAHX, and the company is based out of Malvern, PA. The Vanguard High-Yield Tax-Exempt Investor made its debut in December of 1978 and VWAHX has managed to accumulate roughly $2.32 billion in assets, as of the most recently available information. The fund's current manager, Mathew Kiselak, has been in charge of the fund since July of 2010.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. VWAHX has a 5-year annualized total return of 4.87% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 6.06%, which places it in the top third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. VWAHX's standard deviation over the past three years is 5.57% compared to the category average of 10.11%. The fund's standard deviation over the past 5 years is 5.1% compared to the category average of 8.64%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.76, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VWAHX has a positive alpha of 0.35, which measures performance on a risk-adjusted basis.
Ratings
Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, VWAHX has 26.63% in high quality bonds rated at least 'AA' or higher, while 68.97% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, VWAHX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.81%. Looking at the fund from a cost perspective, VWAHX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.
Bottom Line
Overall, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on VWAHXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.