If investors are looking at the Investment Grade Bond - Long fund category, make sure to pass over Vanguard Long-Term Investment-Grade Income Investor (VWESX Quick QuoteVWESX - Free Report) . VWESX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

VWESX is part of the Investment Grade Bond - Long section, an area loaded with various investment options. Investment Grade Bond - Long funds focus on the long end of the curve, generally with bonds that mature in more than 10 years. Fixed income instruments with this maturity level usually have high duration risk, but they also compensate investors with a heftier yield, at least when compared to their short maturity counterparts. Lastly, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.

History of Fund/Manager

Vanguard Group is based in Malvern, PA, and is the manager of VWESX. Vanguard Long-Term Investment-Grade Income Investor made its debut in July of 1973, and since then, VWESX has accumulated about $3.92 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 0.77%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -6.42%, which places it in the bottom third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 14.91%, the standard deviation of VWESX over the past three years is 15.51%. Over the past 5 years, the standard deviation of the fund is 14.31% compared to the category average of 14.83%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 1.88, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, VWESX has a positive alpha of 2.56, which measures performance on a risk-adjusted basis.

Expenses

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, VWESX is a no load fund. It has an expense ratio of 0.22% compared to the category average of 0.70%. Looking at the fund from a cost perspective, VWESX is actually cheaper than its peers.

This fund requires a minimum initial investment of $3,000, and each subsequent investment should be at least $1.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively similar performance, average downside risk, and lower fees, Vanguard Long-Term Investment-Grade Income Investor ( VWESX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.

This could just be the start of your research on VWESXin the Investment Grade Bond - Long 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.