Muni - Bonds fund seekers should consider taking a look at Wells Fargo Municipals Bond Fund A (WMFAX Quick QuoteWMFAX - Free Report) . WMFAX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes WMFAX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.

History of Fund/Manager

Wells Fargo is based in San Francisco, CA, and is the manager of WMFAX. Since Wells Fargo Municipals Bond Fund A made its debut in April of 2005, WMFAX has garnered more than $1.15 billion in assets. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 3.66%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.2%, 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. Compared to the category average of 12.28%, the standard deviation of WMFAX over the past three years is 4.35%. The fund's standard deviation over the past 5 years is 4.02% compared to the category average of 10.59%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.71, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, WMFAX has a negative alpha of -0.29, 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, WMFAX has 44.37% in high quality bonds rated at least 'AA' or higher, while 45.68% 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, WMFAX is a load fund. It has an expense ratio of 0.77% compared to the category average of 0.83%. So, WMFAX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, Wells Fargo Municipals Bond Fund A ( WMFAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Wells Fargo Municipals Bond Fund A ( WMFAX ) looks like a good potential choice for investors right now.

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