On the lookout for a Muni - Bonds fund? Starting with Vanguard High-Yield Tax-Exempt Investor (VWAHX) is one possibility. VWAHX possesses 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 VWAHX 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
Vanguard Group is based in Malvern, PA, and is the manager of VWAHX. The Vanguard High-Yield Tax-Exempt Investor made its debut in December of 1978 and VWAHX has managed to accumulate roughly $2.45 billion in assets, as of the most recently available information. The fund's current manager, Mathew M. Kiselak, has been in charge of the fund since July of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.53%, 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 6.56%, 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. VWAHX's standard deviation over the past three years is 2.8% compared to the category average of 5.78%. The fund's standard deviation over the past 5 years is 3.44% compared to the category average of 6.23%. This makes the fund less volatile than its peers over the past half-decade.
VWAHX carries a beta of 0.83, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.69, 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, VWAHX has 29.5% in high quality bonds rated at least 'AA' or higher, while 55.98% 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, VWAHX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.83%. From a cost perspective, VWAHX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) looks like a good potential choice for investors right now.
This could just be the start of your research on VWAHXin 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. 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.
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Is VWAHX a Strong Bond Fund Right Now?
On the lookout for a Muni - Bonds fund? Starting with Vanguard High-Yield Tax-Exempt Investor (VWAHX) is one possibility. VWAHX possesses 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 VWAHX 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
Vanguard Group is based in Malvern, PA, and is the manager of VWAHX. The Vanguard High-Yield Tax-Exempt Investor made its debut in December of 1978 and VWAHX has managed to accumulate roughly $2.45 billion in assets, as of the most recently available information. The fund's current manager, Mathew M. Kiselak, has been in charge of the fund since July of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.53%, 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 6.56%, 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. VWAHX's standard deviation over the past three years is 2.8% compared to the category average of 5.78%. The fund's standard deviation over the past 5 years is 3.44% compared to the category average of 6.23%. This makes the fund less volatile than its peers over the past half-decade.
VWAHX carries a beta of 0.83, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.69, 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, VWAHX has 29.5% in high quality bonds rated at least 'AA' or higher, while 55.98% 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, VWAHX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.83%. From a cost perspective, VWAHX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $3,000 and that each subsequent investment needs to be at $1.
Bottom Line
Overall, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard High-Yield Tax-Exempt Investor ( VWAHX ) looks like a good potential choice for investors right now.
This could just be the start of your research on VWAHXin 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. 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.