Is THOPX a Strong Bond Fund Right Now?

Investment Grade Bond - Short fund seekers should consider taking a look at Thompson Bond Fund (THOPX). THOPX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

THOPX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.

History of Fund/Manager

THOPX is a part of the Thompson family of funds, a company based out of Madison, WI. Since Thompson Bond Fund made its debut in February of 1992, THOPX has garnered more than $1.28 billion in assets. Jason Stephens is the fund's current manager and has held that role since February of 2009.

Performance

Investors naturally seek funds with strong performance. THOPX has a 5-year annualized total return of 1.99% 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 1.72%, 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. Over the past three years, THOPX's standard deviation comes in at 3.48%, compared to the category average of 2.73%. Over the past 5 years, the standard deviation of the fund is 5.63% compared to the category average of 3.18%. This makes the fund more volatile than its peers over the past half-decade.

With a beta of 0.17, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, THOPX has a positive alpha of 0.52, which measures performance on a risk-adjusted basis.

Ratings

Expenses

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, THOPX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 0.58%. From a cost perspective, THOPX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50

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 strong performance, average downside risk, and higher fees, Thompson Bond Fund ( THOPX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

For additional information on the Investment Grade Bond - Short area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into THOPX too 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.

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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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