If investors are looking at the Mutual Fund Bond fund category, USAA Tax-Exempt Intermediate-Term (USATX) could be a potential option. USATX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
USATX is a part of the Victory family of funds, a company based out of Columbus, OH. USAA Tax-Exempt Intermediate-Term made its debut in March of 1982, and since then, USATX has accumulated about $2.69 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 1.12%, 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 -1.82%, 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. USATX's standard deviation over the past three years is 5.45% compared to the category average of 11.33%. The fund's standard deviation over the past 5 years is 5.32% compared to the category average of 11.94%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.74, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, USATX has a positive alpha of 0.02, which measures performance on a risk-adjusted basis.
Ratings
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, USATX is a no load fund. It has an expense ratio of 0.49% compared to the category average of 0.78%. Looking at the fund from a cost perspective, USATX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $3,000; each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, USAA Tax-Exempt Intermediate-Term ( USATX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into USATX too 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
