Having trouble finding a Muni - Bonds fund? Vanguard Intermediate-Term Tax-Exempt Admiral (VWIUX Quick QuoteVWIUX - Free Report) is a potential starting point. VWIUX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

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. The Vanguard Intermediate-Term Tax-Exempt Admiral made its debut in February of 2001 and VWIUX has managed to accumulate roughly $85.43 billion in assets, as of the most recently available information. The fund's current manager, James D'Arcy, has been in charge of the fund since June of 2013.

Performance

Investors naturally seek funds with strong performance. VWIUX has a 5-year annualized total return of 1.4%, 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 3.73%, which places it in the middle 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. The standard deviation of VWIUX over the past three years is 4.88% compared to the category average of 7.77%. The standard deviation of the fund over the past 5 years is 5.34% compared to the category average of 9.01%. This makes the fund less volatile than its peers over the past half-decade.

Bond Duration

Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.

For investors who think interest rates will rise, this is an important factor to consider. VWIUX has a modified duration of 5.75, which suggests that the fund will decline 5.75% for every hundred-basis-point increase in interest rates.

Income

We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 4.66% means that a $10,000 investment should result in a yearly payout of $466.

For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.

This fund has a beta of 0.6, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VWIUX has a negative alpha of -0.01, 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, VWIUX has 57.45% in high quality bonds rated at least "AA" or higher, while 33.34% 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

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, VWIUX is a no load fund. It has an expense ratio of 0.09% compared to the category average of 0.75%. From a cost perspective, VWIUX is actually cheaper than its peers.

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 consideration. 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.

Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.