Vanguard Long-Term Treasury Fund (VUSTX) Investor Shares

The Vanguard Long-Term Treasury Fund (Ticker: VUSTX) is part of taxable bond mutual fund. This investor shares fund invests in long duration government bonds.

Vanguard Long-Term Treasury Investor (VUSTX)

The investment objective of Vanguard Long-Term Treasury fund is to achieve a high and sustainable level of current income. This mutual fund utilizes its assets to purchase U.S. Treasury securities. These securities may include bills, bonds, and notes issued by the U.S. Treasury. It is expected to maintain a dollar-weighted average maturity of 15 to 30 years. The current fund’s NAV is $13.59 (11/27/2012).

Fund Profile

• Fund Inception Date: May 18, 1986
• Ticker Symbol: VUSTX
• CUSIP: 922031505
• Beta (3yr): 3.16
• Rank in category (YTD): 65%
• Category: Long Government
• Distribution: 2.53%
• Capital Gains: 0%
• Expense Ratio: 0.20%
• Net Assets: $ 3.93 billion
• Number of Years Up: 20 years
• Number of Years Down: 5 years
• Average Maturity: 23.2 years
• Average duration: 15.6 years
• Annual Turnover Rate: 229%

Updated on 12/20/2012

As one of the Vanguard fund, it has total net assets of $3.93 billion. The Investor class fund was first introduced to public in 1986. David R. Glocke is the current fund manager. Its annual expense ratio is only 0.20%. The portfolio holdings turnover is rather high 229% as of September 27, 2012. There is no management fee and also no front-end sales load fee. It has 4-stars and Silver rating from Morningstar.

Best Long Government Bond Mutual Funds

This long government mutual fund has YTD return of 6.85%. The best 1-year total return was occurred in 2011 with 29.27%. The worst 1-year total return was occurred in 2009 with -12.06%. The fund’s benchmark is Barclays US Long Treasury Index. Based on the load adjusted returns, the fund’s performance is as below:

• 1-year: 91.47%
• 3-year: 13.28%
• 5-year: 11.38%
• 10-year: 8.20%

Investors can buy this mutual fund with $3,000 initial funding for brokerage account. This fund is available for purchase through 94 brokerages. They are E Trade Financial, JP Morgan, T Rowe Price, EP Fee Small, Schwab Institutional, Fidelity Institutional Funds Network, Ameriprise Brokerage, etc. It has 0.20% of annual expense ratio.

The distribution by issuer as of August 2012 is Treasury/ Agency (94.7%), Government Mortgage-Backed (5.0%) and Short-Term Reserves (0.3%).  The other class of this fund is Admiral Shares (VUSUX).

According to the fund prospectus, the investment risks are interest rate risk, manager risk, market risk, fixed income risk, etc.

Disclosure: No Position

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