Yahoo Finance Is VNYTX a Strong Bond Fund Right Now?
On the lookout for a Muni - Bonds fund? Starting with Vanguard NY Long-Term Tax-Exempt Investor (VNYTX) is one possibility. VNYTX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
VNYTX 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
VNYTX finds itself in the Vanguard Group family, based out of Malvern, PA. The Vanguard NY Long-Term Tax-Exempt Investor made its debut in April of 1986 and VNYTX has managed to accumulate roughly $469.82 million in assets, as of the most recently available information. The fund is currently managed by Adam Ferguson who has been in charge of the fund since June of 2016.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 1%, 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 -1.46%, 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. Compared to the category average of 11.61%, the standard deviation of VNYTX over the past three years is 8.95%. Looking at the past 5 years, the fund's standard deviation is 7.76% compared to the category average of 11.6%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.99, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, VNYTX has a positive alpha of 0.38, 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, VNYTX has 70.29% in high quality bonds rated at least 'AA' or higher, while 25.4% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, 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, VNYTX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.84%. VNYTX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $3,000, and each subsequent investment should 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 NY Long-Term Tax-Exempt Investor ( VNYTX ) 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.
For additional information on this product, or to compare it to other mutual funds in the Muni - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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