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Is VUSTX a Strong Bond Fund Right Now?

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There are plenty of choices in the Government Bond - Long category, but where should you start your research? Well, one fund that you should consider investigating is Vanguard Long-Term Treasury Investor (VUSTX - Free Report) . VUSTX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.


VUSTX is part of the Government Bond - Long section, a segment that boasts an array of possible selections. Government Bond - Long funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category focuses on the long end of the curve, and that results in higher yields, but greater sensitivity to interest rate fluctuations, too.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VUSTX. Vanguard Long-Term Treasury Investor debuted in May of 1986. Since then, VUSTX has accumulated assets of about $1.01 billion, according to the most recently available information. Gemma Wright Casparius is the fund's current manager and has held that role since January of 2015.


Investors naturally seek funds with strong performance. VUSTX has a 5-year annualized total return of 6.94% and is 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 10.49%, 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. VUSTX's standard deviation over the past three years is 12.52% compared to the category average of 13.98%. The fund's standard deviation over the past 5 years is 11.59% compared to the category average of 12.4%. This makes the fund less volatile than its peers over the past half-decade.

VUSTX carries a beta of 3.05, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -3.06, which measures performance on a risk-adjusted basis.


As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, VUSTX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.86%. Looking at the fund from a cost perspective, VUSTX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.

Bottom Line

Overall, Vanguard Long-Term Treasury Investor ( VUSTX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard Long-Term Treasury Investor ( VUSTX ) looks like a somewhat average choice for investors right now.

This could just be the start of your research on VUSTXin the Government Bond - Long category. Consider going to for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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