There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that might be worth investigating is Vanguard PA Long-Term Tax-Exempt Investor (VPAIX Quick QuoteVPAIX - Free Report) . VPAIX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

VPAIX finds itself in the Vanguard Group family, based out of Malvern, PA. Vanguard PA Long-Term Tax-Exempt Investor made its debut in April of 1986, and since then, VPAIX has accumulated about $388.96 million in assets, per the most up-to-date date available. The fund is currently managed by James D'Arcy who has been in charge of the fund since November of 2011.

Performance

Of course, investors look for strong performance in funds. VPAIX has a 5-year annualized total return of 4.03% 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 6.16%, which places it in the top third during this time-frame.

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 VPAIX over the past three years is 4.18% compared to the category average of 9.63%. The fund's standard deviation over the past 5 years is 4.12% compared to the category average of 8.21%. This makes the fund less volatile than its peers over the past half-decade.

VPAIX carries a beta of 0.64, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.51, 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, VPAIX has 40.51% in high quality bonds rated at least 'AA' or higher, while 57.63% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, 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, VPAIX is a no load fund. It has an expense ratio of 0.17% compared to the category average of 0.80%. VPAIX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $1.

Bottom Line

Overall, Vanguard PA Long-Term Tax-Exempt Investor ( VPAIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Vanguard PA Long-Term Tax-Exempt Investor ( VPAIX ) looks like a good potential choice for investors right now.

Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.