Is PCLAX a Strong Bond Fund Right Now?
Diversified Bonds fund seekers should consider taking a look at PIMCO CommoditiesPlus Strategy A (PCLAX). PCLAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
We classify PCLAX in the Diversified Bonds category, an area that is rife with potential choices. Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.
History of Fund/Manager
PCLAX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. Since PIMCO CommoditiesPlus Strategy A made its debut in June of 2010, PCLAX has garnered more than $70.92 million in assets. Nicholas Johnson is the fund's current manager and has held that role since June of 2010.
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of -6.84%, and it sits in the top 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 -3.39%, which places it in the top 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. Compared to the category average of 14%, the standard deviation of PCLAX over the past three years is 25.96%. The standard deviation of the fund over the past 5 years is 22.94% compared to the category average of 12.71%. This makes the fund more volatile than its peers over the past half-decade.
With a beta of -0.68, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PCLAX has a negative alpha of -1.97, which measures performance on a risk-adjusted basis.
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, PCLAX is a load fund. It has an expense ratio of 1.19% compared to the category average of 0.89%. From a cost perspective, PCLAX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Overall, PIMCO CommoditiesPlus Strategy A ( PCLAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, PIMCO CommoditiesPlus Strategy A ( PCLAX ) looks like a good potential choice for investors right now.
Don't stop here for your research on Diversified Bonds 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 PCLAX 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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