Is OIBYX a Strong Bond Fund Right Now?
There are plenty of choices in the International Bond - Developed category, but where should you start your research? Well, one fund that may not be worth investigating is Oppenheimer International Bond Y (OIBYX). OIBYX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
OIBYX is one of many International Bond - Developed funds to choose from. International Bond - Developed funds offer investors geographic diversification by focusing on fixed income securities from developed nations besides the United States. Top holdings include assets from countries like Japan, Germany, the UK, France, and Australia. While these is certainly an advantage, investors should be aware of currency risk.
History of Fund/Manager
Invesco is responsible for OIBYX, and the company is based out of Kansas City, MO. Oppenheimer International Bond Y debuted in October of 2004. Since then, OIBYX has accumulated assets of about $1.16 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. OIBYX has a 5-year annualized total return of 2.81% 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 1.05%, 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. OIBYX's standard deviation over the past three years is 11.98% compared to the category average of 11.2%. Looking at the past 5 years, the fund's standard deviation is 9.9% compared to the category average of 10.43%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.73, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, OIBYX has a negative alpha of -0.14, which measures performance on a risk-adjusted basis.
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, OIBYX has 34.3% in high quality bonds rated at least 'AA' or higher, while 36.51% are of medium quality, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 27.02%, giving OIBYX an average quality of A. This means that it focuses on high quality securities.
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, OIBYX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 0.98%. From a cost perspective, OIBYX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Overall, Oppenheimer International Bond Y ( OIBYX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on OIBYXin the International Bond - Developed category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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