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Is DLTNX a Strong Bond Fund Right Now?

Government Mortgage - Intermediate fund seekers should not consider taking a look at DoubleLine Total Return Bond N (DLTNX) at this time. DLTNX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Government Mortgage - Intermediate funds is an area filled with choices, such as DLTNX. A mortgage-backed security (MBS) is a type of asset-backed security that packages mortgages together and then sells off the pooled securities. Government Mortgage - Intermediate funds focus on this market; this fund category presents a medium risk and yield profile, and concentrates on MBS with at least three years to maturity but less than 10.

History of Fund/Manager

Double Line is based in Los Angeles, CA, and is the manager of DLTNX. Since DoubleLine Total Return Bond N made its debut in April of 2010, DLTNX has garnered more than $5.18 billion in assets. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 2.69%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.78%, which places it in the bottom 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 DLTNX over the past three years is 3.42% compared to the category average of 11.51%. The standard deviation of the fund over the past 5 years is 2.92% compared to the category average of 9.59%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.74, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, DLTNX has a positive alpha of 0.15, 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, DLTNX has 66.81% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AA, and focuses on high quality securities.

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, DLTNX is a no load fund. It has an expense ratio of 0.74% compared to the category average of 0.79%. DLTNX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, DoubleLine Total Return Bond N ( DLTNX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Government Mortgage - Intermediate 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 DLTNX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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