Yahoo Finance Is ACTDX a Strong Bond Fund Right Now?
Any investors hoping to find a Muni - Bonds fund could think about starting with Invesco High Yield Municipals Y (ACTDX). ACTDX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify ACTDX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
ACTDX finds itself in the Invesco family, based out of Kansas City, MO. The Invesco High Yield Municipals Y made its debut in March of 2006 and ACTDX has managed to accumulate roughly $1.85 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0.64%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -2.5%, 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 ACTDX over the past three years is 10.13% compared to the category average of 13.14%. Looking at the past 5 years, the fund's standard deviation is 9.86% compared to the category average of 13.92%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.06, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, ACTDX has a positive alpha of 0.45, which measures performance on a risk-adjusted basis.
Ratings
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, ACTDX has 19.24% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.
However, it is worth noting that 52 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
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, ACTDX is a no load fund. It has an expense ratio of 1.29% compared to the category average of 0.94%. ACTDX 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 $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 weak performance, average downside risk, and higher fees, Invesco High Yield Municipals Y ( ACTDX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
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