There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that may not be worth investigating is Lord Abbett High Yield A (LHYAX). LHYAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Lord Abbett is based in Jersey City, NJ, and is the manager of LHYAX. Lord Abbett High Yield A made its debut in December of 1998, and since then, LHYAX has accumulated about $706.07 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.56%, and is in the bottom 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 -0.13%, which places it in the bottom 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 LHYAX over the past three years is 8.23% compared to the category average of 13.86%. Looking at the past 5 years, the fund's standard deviation is 10.81% compared to the category average of 14.62%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.14, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LHYAX has a positive alpha of 2.13, which measures performance on a risk-adjusted basis.
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, LHYAX is a load fund. It has an expense ratio of 0.92% compared to the category average of 0.96%. Looking at the fund from a cost perspective, LHYAX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,500, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, Lord Abbett High Yield A ( LHYAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Bond, make sure to go to www.zacks.com/funds/mutual-funds 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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