Technology

Is SEKSX a Strong Bond Fund Right Now?

If you have been looking for Muni - Bonds fund category, a potential starting could be AI Kansas Tax-Exempt Bond I (SEKSX). SEKSX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes SEKSX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.

History of Fund/Manager

AIF is based in New York, NY, and is the manager of SEKSX. AI Kansas Tax-Exempt Bond I debuted in December of 1990. Since then, SEKSX has accumulated assets of about $169.25 million, according to the most recently available information. The fund's current manager, Neil Klein, has been in charge of the fund since December of 2016.

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 2.84%, 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 3.4%, 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. SEKSX's standard deviation over the past three years is 2.89% compared to the category average of 8.44%. The standard deviation of the fund over the past 5 years is 2.58% compared to the category average of 7.7%. This makes the fund less volatile than its peers over the past half-decade.

SEKSX carries a beta of 0.54, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.13, which measures performance on a risk-adjusted basis.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, SEKSX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.82%. So, SEKSX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $3 million and that each subsequent investment needs to be at $5,000.

Bottom Line

Overall, AI Kansas Tax-Exempt Bond I ( SEKSX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Your research on the Muni - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


Click to get this free report

Get Your Free (SEKSX): Fund Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Technology Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More