Is FRFZX a Strong Bond Fund Right Now?

Having trouble finding a Mutual Fund Bond fund? PGIM Floating Rate Income Z (FRFZX) is a possible starting point. FRFZX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

PGIM is based in Providence, RI, and is the manager of FRFZX. The PGIM Floating Rate Income Z made its debut in March of 2011 and FRFZX has managed to accumulate roughly $1.57 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 4.48%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.07%, 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. The standard deviation of FRFZX over the past three years is 4.56% compared to the category average of 11.96%. Over the past 5 years, the standard deviation of the fund is 8.79% compared to the category average of 13.22%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of -0.2, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FRFZX has a positive alpha of 3.26, 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, FRFZX 's junk bond component-bonds rated 'BB' or below-is at 71.59%. 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, FRFZX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 0.98%. FRFZX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, PGIM Floating Rate Income Z ( FRFZX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average 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 FRFZX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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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.

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