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Is BFRAX a Strong Bond Fund Right Now?

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If you've been stuck searching for Mutual Fund Bond funds, consider BlackRock Floating Rate Income A (BFRAX) as a possibility. BFRAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

BFRAX is a part of the BlackRock family of funds, a company based out of New York, NY. Since BlackRock Floating Rate Income A made its debut in July of 2010, BFRAX has garnered more than $331.50 million in assets. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.4%, 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 3.33%, which places it in the top 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. Compared to the category average of 13.44%, the standard deviation of BFRAX over the past three years is 7.68%. The standard deviation of the fund over the past 5 years is 5.96% compared to the category average of 11.03%. This makes the fund less volatile than its peers over the past half-decade.

BFRAX carries a beta of 0.2, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 2.23, 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 0.96% compared to the category average of 0.85%. From a cost perspective, BFRAX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to 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, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BFRAX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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