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Is VUSTX a Strong Bond Fund Right Now?

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Any investors hoping to find a Mutual Fund Bond fund could think about starting with Vanguard Long-Term Treasury Investor (VUSTX - Free Report) . VUSTX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

Vanguard Group is responsible for VUSTX, and the company is based out of Malvern, PA. Since Vanguard Long-Term Treasury Investor made its debut in May of 1986, VUSTX has garnered more than $788.01 million in assets. Gemma Wright Casparius is the fund's current manager and has held that role since January of 2015.

Performance

Investors naturally seek funds with strong performance. VUSTX has a 5-year annualized total return of 4.07% 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 11.12%, 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 14.84%, the standard deviation of VUSTX over the past three years is 13.19%. The fund's standard deviation over the past 5 years is 11.79% compared to the category average of 12.8%. This makes the fund less volatile than its peers over the past half-decade.

VUSTX carries a beta of 3.29, 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 -2.82, which measures performance on a risk-adjusted basis.

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, VUSTX is a no load fund. It has an expense ratio of 0.20% compared to the category average of 0.82%. From a cost perspective, VUSTX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard Long-Term Treasury Investor ( VUSTX ) 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.

Want even more information about VUSTX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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