Is BMSAX a Strong Bond Fund Right Now?

Mutual Fund Bond fund seekers should not consider taking a look at Blackrock Credit Strategies Income A (BMSAX) at this time. BMSAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of BMSAX. Since Blackrock Credit Strategies Income A made its debut in March of 2010, BMSAX has garnered more than $225.94 million in assets. The fund is currently managed by a team of investment professionals.

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 3.48%, and is in the middle 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 4.56%, which places it in the middle 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 BMSAX over the past three years is 7.93% compared to the category average of 13.28%. Looking at the past 5 years, the fund's standard deviation is 6.31% compared to the category average of 10.96%. This makes the fund less volatile than its peers over the past half-decade.

BMSAX carries a beta of 0.71, 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 1.35, 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, BMSAX 's junk bond component-bonds rated 'BB' or below-is at 64.35%. This means that the fund has an average quality of BBB, and focuses on medium 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, BMSAX is a load fund. It has an expense ratio of 0.87% compared to the category average of 0.79%. So, BMSAX is actually more expensive than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, Blackrock Credit Strategies Income A ( BMSAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, Blackrock Credit Strategies Income A ( BMSAX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BMSAX to its peers as well 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.