| Scorecard |
|---|
|
4 / 5 Stars
|
|
Lipper
4
4
3
5
5
|
|
Zacks Investment Research
3
(Hold)
|
|
Standard & Poor's
5 / 5 Stars
|
|
TheStreet.com
B+
(Buy)
|
U.S. News evaluated 83 Muni National Interm Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
Note: Profile written for different share class.
Performance
The fund has returned 4.71 percent over the past year, 5.68 percent over the past three years, 5.60 percent over the past five years, and 4.56 percent over the past decade.
| Trailing Returns | Updated 04.30.2013 |
|---|---|
| Year to date | 1.3% |
| 1 Year | 4.7% |
| 3 Years (Annualized) | 5.7% |
| 5 Years (Annualized) | 5.6% |
| 10 Years (Annualized) | 4.6% |
Summary
It is the paradox of markets that a focus on quality can be both a blessing and a curse. While Vanguard Intermediate-Term Tax-Exempt's attention to high credit ratings generally serves it well, it can lose out when riskier high-yield bonds are hot.
As of May 03, 2013, the fund has assets totaling $39.25 billion. Its portfolio consists primarily of tax-free municipal bonds.
The failure of firms like Lehman Brothers and the ensuing credit crunch hurt even conservative funds like Vanguard Intermediate-Term Tax-Exempt. Meanwhile, the fund was also been a bit sluggish during the rebound as investors looked with newfound favor at high-yield investments. The fund's management noticed this trend and picked up some longer-maturity holdings. Overall, though, this gigantic fund has put up respectable numbers recently and has done well despite some changes in its management. Christopher Ryon left the fund in 2007 after a 16-year stint as manager, and current manager Michael Kobs has been in charge only since 2008. The fund has returned 4.71 percent over the past year and 5.68 percent over the past three years.
Historically, the fund has boasted solid returns by keeping the vast majority of its assets in highly rated municipal bonds. It has stuck with this strategy in all market environments, making it a steady performer. In one of its annual report, the fund reiterated its traditional stance, saying, "As stock markets have tumbled, and even typically staid segments of the investment markets such as municipal securities have experienced high levels of volatility, the temptation to 'do something' has no doubt been strong. Our experience suggests that, more often than not, acting on such an emotional response is counterproductive." At the same time, the fund's ultra-low annual expense ratio of just 0.15 percent gives managers some room to play it safe. The fund has returned 5.60 percent over the past five years and 4.56 percent over the past decade.
Investment Strategy
The fund focuses more on income than some of its peers do. The average maturity for its bonds tends to be six to 12 years. "In unusual circumstances, however, such as apparent market turning points, management will go outside the normal maturity range," notes Value Line.
Role in Portfolio
Morningstar calls it a "core" investment.
Management
Manager Michael Kobs takes a cautious approach, putting nearly all of the fund's assets in conservative investments. Morningstar says, "Michael Kobs is one of the newer members of Vanguard's team, but he is backed by veteran managers and several credit analysts who conduct research for the firm's muni fund lineup."
Fees
Vanguard Intermediate-Term Tax-Exempt Fund has an expense ratio of 0.12 percent.
Fund Opinions
The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 3 on a scale of 1 to 5, with 1 being the best and 5 the worst.
Value Line 2013-03-12
The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 3 for one year, 3 for five years, and 3 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.
Value Line 2013-03-12
The fund's Value Line Risk Rank, a measure of volatility, is 3 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.
Value Line 2013-03-12
The fund appears on the 2011 Money 70 list of recommended mutual and exchange-traded funds.
Money 70 2011-01-21
Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "The family's mutual ownership structure helps it offer low fees and keep investor interests paramount. A blemish-free regulatory record and loyal fund owners and employees also help make this a trustworthy fund."
Morningstar 2010-02-17
In the annual Lipper/Barron’s Fund Families Survey for 2009, Vanguard ranks 40th out of 61 fund families surveyed.
2010-02-17
Morningstar gives this fund a stewardship rating of B on a scale of A to F, saying, "The family's mutual ownership structure helps it offer low fees and keep investor interests paramount. A blemish-free regulatory record and loyal fund owners and employees also help make this a trustworthy fund."
Morningstar 2010-02-17
In the annual Lipper/Barron’s Fund Families Survey for 2009, Vanguard ranks 40th out of 61 fund families surveyed.
2010-02-17
