On the lookout for a Muni - Bonds fund? Starting with USAA Tax-Exempt Intermediate-Term (USATX) is one possibility. USATX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
USATX 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
Victory is based in Columbus, OH, and is the manager of USATX. Since USAA Tax-Exempt Intermediate-Term made its debut in March of 1982, USATX has garnered more than $2.51 billion in assets. Andrew Hattman is the fund's current manager and has held that role since July of 2019.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 1.26%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -0.03%, which places it in the middle 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. The standard deviation of USATX over the past three years is 6.15% compared to the category average of 11.62%. Looking at the past 5 years, the fund's standard deviation is 5.75% compared to the category average of 12%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.65, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, USATX has a positive alpha of 0.05, 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 0.84%. USATX 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 $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, USAA Tax-Exempt Intermediate-Term ( USATX ) looks like a good potential choice for investors right now.
For additional information on the Muni - Bonds 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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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.
