Is PONPX a Strong Bond Fund Right Now?
MF Bond Report for PONPX
If you have been looking for Diversified Bonds funds, a place to start could be PIMCO Income P (PONPX). PONPX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
PONPX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
PIMCO Funds is based in Newport Beach, CA, and is the manager of PONPX. The PIMCO Income P made its debut in May of 2008 and PONPX has managed to accumulate roughly $36.72 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.94%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.38%, 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. Over the past three years, PONPX's standard deviation comes in at 5.7%, compared to the category average of 13.78%. Looking at the past 5 years, the fund's standard deviation is 4.52% compared to the category average of 11.38%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.31, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PONPX has a positive alpha of 3.23, 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, PONPX has 21.55% in high quality bonds rated at least 'AA' or higher, while 30.31% are of medium quality, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 40.27%, giving PONPX an average quality of BBB. This means that it focuses on medium quality securities.
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, PONPX is a no load fund. It has an expense ratio of 0.60% compared to the category average of 0.85%. Looking at the fund from a cost perspective, PONPX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1 million and that each subsequent investment has no minimum amount.
Overall, PIMCO Income P ( PONPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Diversified 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.
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