Back to top

Image: Bigstock

Is VWIUX a Strong Bond Fund Right Now?

Read MoreHide Full Article

Muni - Bonds fund seekers should consider taking a look at Vanguard Intermediate-Term Tax-Exempt Admiral (VWIUX - Free Report) . VWIUX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.


VWIUX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.

History of Fund/Manager

Vanguard Group is responsible for VWIUX, and the company is based out of Malvern, PA. Vanguard Intermediate-Term Tax-Exempt Admiral debuted in February of 2001. Since then, VWIUX has accumulated assets of about $69.38 billion, according to the most recently available information. The fund is currently managed by James D'Arcy who has been in charge of the fund since June of 2013.


Investors naturally seek funds with strong performance. VWIUX has a 5-year annualized total return of 1.53% 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 -0.53%, which places it in the top 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. VWIUX's standard deviation over the past three years is 6.13% compared to the category average of 10.22%. Looking at the past 5 years, the fund's standard deviation is 5.48% compared to the category average of 10.44%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.72, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWIUX has a positive alpha of 0.13, 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, VWIUX has 59.41% in high quality bonds rated at least 'AA' or higher, while 36.06% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.


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, VWIUX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 0.79%. So, VWIUX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $50,000, investors should also note that each subsequent investment needs to 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, Vanguard Intermediate-Term Tax-Exempt Admiral ( VWIUX ) 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 VWIUX? Then go over to 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

See More Zacks Research for These Tickers

Normally $25 each - click below to receive one report FREE:

Vanguard Interm-Term Tax-Exempt Adm (VWIUX) - free report >>

Published in