2 / 5 Stars
2 2 5 5 4
Zacks Investment Research
Standard & Poor's
4 / 5 Stars
#24 in Muni National Short
U.S. News evaluated 48 Muni National Short Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.
The fund has returned 0.64 percent over the past year, 1.07 percent over the past three years, 1.31 percent over the past five years, and 2.08 percent over the past decade.
|Trailing Returns||Updated 02.28.2014|
|Year to date||0.4%|
|3 Years (Annualized)||1.1%|
|5 Years (Annualized)||1.3%|
|10 Years (Annualized)||2.1%|
Vanguard Short-Term Tax-Exempt Fund is a municipal bond fund that sticks to its strategy.
As of March 05, 2014, the fund has assets totaling $12.71 billion. Its portfolio consists of short-term, tax-exempt municipal bonds.
The fund's conservative nature and resemblance to a money market fund held it back in 2009, when its 3.1 percent return put it in the bottom three percent of Morningstar's muni national short category. But many of the funds that performed well in 2009 were making up for ground they lost during the recession, which is something that this fund hardly had to worry about. During the downturn, the fund hunkered down with its conservative strategy, which served it well. The fund invests in bonds with short maturities. While some of its peers deviated into longer-term fare and paid a price in 2008, this one produced trickling but steady returns. The fund's tax advantages and aversion to credit risk also contributed to its strength during the down market. Looking ahead, the fund's strengths - short-duration, high-quality bonds - could fare better than many bond funds as interest rates increase. The fund has returned 0.64 percent over the past year and 1.07 percent over the past three years.
The fund has achieved a long track record of steady returns by investing in high-quality, tax-exempt municipal debt. In particular, its resemblance to a money market fund has made it a safe parking place for cash. "The fund's short maturity and use of variable-rate notes make it look a lot like a tax-free money market fund but with greater return potential and price volatility," says Morningstar. The fund has returned 1.31 percent over the past five years and 2.08 percent over the past decade.
According to its prospectus, "The fund has no limitations on the maturity of individual securities but is expected to maintain a dollar-weighted average maturity of one to two years." Meanwhile, it has a preference for high-quality debt.
Role in Portfolio
Morningstar calls it a "supporting player."
Manager Pam Wisehaupt-Tynan has been in charge since 1997.
Vanguard Short Term Tax Exempt Fund has an expense ratio of 0.20 percent.