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Is VPAIX a Strong Bond Fund Right Now?

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Having trouble finding a Mutual Fund Bond fund? Vanguard PA Long-Term Tax-Exempt Investor (VPAIX - Free Report) is a potential starting point. VPAIX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VPAIX is a part of the Vanguard Group family of funds, a company based out of Malvern, PA. Vanguard PA Long-Term Tax-Exempt Investor debuted in April of 1986. Since then, VPAIX has accumulated assets of about $285.18 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

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 0.49%, and it sits 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 -2.52%, which places it in the middle 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. Compared to the category average of 11.21%, the standard deviation of VPAIX over the past three years is 6.34%. The standard deviation of the fund over the past 5 years is 5.32% compared to the category average of 9.7%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.89, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VPAIX has a positive alpha of 0.19, 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 35.58% in high quality bonds rated at least 'AA' or higher, while 61.33% 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

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, VPAIX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.79%. So, VPAIX is actually cheaper than its peers from a cost perspective.

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 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.

Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VPAIX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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