Yahoo Finance Is VPAIX a Strong Bond Fund Right Now?
Muni - Bonds fund seekers should consider taking a look at Vanguard PA Long-Term Tax-Exempt Investor (VPAIX). VPAIX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify VPAIX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
Vanguard Group is based in Malvern, PA, and is the manager of VPAIX. Vanguard PA Long-Term Tax-Exempt Investor debuted in April of 1986. Since then, VPAIX has accumulated assets of about $285.49 million, according to the most recently available information. James D'Arcy is the fund's current manager and has held that role since November of 2011.
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 1.16%, 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 -1.47%, 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. Over the past three years, VPAIX's standard deviation comes in at 8.42%, compared to the category average of 10.9%. Over the past 5 years, the standard deviation of the fund is 7.26% compared to the category average of 10.93%. This makes the fund less volatile than its peers over the past half-decade.
VPAIX carries a beta of 0.93, 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 0.42, 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, VPAIX has 41.13% in high quality bonds rated at least 'AA' or higher, while 53.62% 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, VPAIX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.82%. From a cost perspective, VPAIX is actually cheaper than its peers.
While the minimum initial investment for the product is $3,000, 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 PA Long-Term Tax-Exempt Investor ( VPAIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard PA Long-Term Tax-Exempt Investor ( VPAIX ) looks like a good potential choice for investors right now.
Want even more information about VPAIX? 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. 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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