Mutual Fund Bond fund seekers should consider taking a look at American Century CA High Yield Municipal Investor (BCHYX). BCHYX has 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
American Century is based in Kansas City, MO, and is the manager of BCHYX. American Century CA High Yield Municipal Investor debuted in December of 1986. Since then, BCHYX has accumulated assets of about $689.73 million, according to the most recently available information. The fund is currently managed by Joseph Gotelli who has been in charge of the fund since January of 2012.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 1.44%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -0.41%, 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. Compared to the category average of 13.04%, the standard deviation of BCHYX over the past three years is 7.35%. The fund's standard deviation over the past 5 years is 7.28% compared to the category average of 13.51%. This makes the fund less volatile than its peers over the past half-decade.
BCHYX carries a beta of 1.01, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.38, which measures performance on a risk-adjusted basis.
Ratings
However, it is worth noting that 48 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, BCHYX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.77%. BCHYX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $2,500, investors should also note that 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, American Century CA High Yield Municipal Investor ( BCHYX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, American Century CA High Yield Municipal Investor ( BCHYX ) 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.
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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.
