Is FLARX a Strong Bond Fund Right Now?

Yahoo

2 days ago

Investment Grade Bond - Short fund seekers should not consider taking a look at Pioneer Floating Rate A (FLARX) at this time. FLARX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
FLARX is classified in the Investment Grade Bond - Short segment by Zacks, an area full of investment potential. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. Fixed income instruments at this maturity level tend to have low duration risk, but they also pay out small yields compared to their longer-dated peers. Furthermore, these funds'focus on investment grade make them safer, but yields will be lower than in the junk bond category.
Amundi US is based in Boston, MA, and is the manager of FLARX. Since Pioneer Floating Rate A made its debut in February of 2007, FLARX has garnered more than $58.36 million in assets. Jonathan Sharkey is the fund's current manager and has held that role since February of 2007.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 5.58%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 6.31%, 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 FLARX over the past three years is 3.66% compared to the category average of 10.5%. Over the past 5 years, the standard deviation of the fund is 3.45% compared to the category average of 10.23%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of -0.11, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FLARX has a positive alpha of 3.46, 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, FLARX is a load fund. It has an expense ratio of 1.05% compared to the category average of 0.98%. FLARX is actually more expensive than its peers when you consider factors like cost.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Overall, Pioneer Floating Rate A ( FLARX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, Pioneer Floating Rate A ( FLARX ) looks like a somewhat weak 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 FLARX 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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This article originally published on Zacks Investment Research (zacks.com).
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