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Is BFRAX a Strong Bond Fund Right Now?

If investors are looking at the Mutual Fund Bond fund category, BlackRock Floating Rate Income A (BFRAX) could be a potential option. BFRAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

BlackRock is responsible for BFRAX, and the company is based out of New York, NY. Since BlackRock Floating Rate Income A made its debut in July of 2010, BFRAX has garnered more than $348.87 million in assets. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 3.03%, 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 5.91%, which places it in the middle third during this time-frame.

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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. Compared to the category average of 12.7%, the standard deviation of BFRAX over the past three years is 4.16%. The standard deviation of the fund over the past 5 years is 6.5% compared to the category average of 13.12%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, BFRAX has a positive alpha of 1.78, which measures performance on a risk-adjusted basis.

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, BFRAX is a load fund. It has an expense ratio of 0.90% compared to the category average of 0.83%. From a cost perspective, BFRAX is actually more expensive than its peers.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.

Bottom Line

Overall, BlackRock Floating Rate Income A ( BFRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and higher fees, BlackRock Floating Rate Income A ( BFRAX ) looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Bond 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 BFRAX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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Zacks Investment Research