If you've been stuck searching for Muni - Bonds funds, consider USAA Tax-Exempt Intermediate-Term (
USATX Quick Quote USATX - Free Report) as a possibility. USATX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance. Objective
Zacks categorizes USATX 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
Victory is responsible for USATX, and the company is based out of Columbus, OH. Since USAA Tax-Exempt Intermediate-Term made its debut in March of 1982, USATX has garnered more than $4.05 billion in assets. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.28%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.07%, 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. USATX's standard deviation over the past three years is 4.28% compared to the category average of 9.5%. The standard deviation of the fund over the past 5 years is 4.1% compared to the category average of 8.13%. This makes the fund less volatile than its peers over the past half-decade.
USATX carries a beta of 0.57, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.26, which measures performance on a risk-adjusted basis.
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, USATX has 27.78% in high quality bonds rated at least 'AA' or higher, while 65% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, USATX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.80%. So, USATX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $50.
Overall, USAA Tax-Exempt Intermediate-Term ( USATX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, USAA Tax-Exempt Intermediate-Term ( USATX ) looks like a good potential choice for investors right now.
This could just be the start of your research on USATXin 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. 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.