Yahoo Finance Is LBNDX a Strong Bond Fund Right Now?
Having trouble finding a High Yield - Bonds fund? Well, Lord Abbett Bond Debenture A (LBNDX) would not be a good potential starting point right now. LBNDX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
LBNDX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Lord Abbett is responsible for LBNDX, and the company is based out of Jersey City, NJ. The Lord Abbett Bond Debenture A made its debut in April of 1971 and LBNDX has managed to accumulate roughly $4.64 billion in assets, as of the most recently available information. 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. LBNDX has a 5-year annualized total return of 2.13% and it sits in the middle 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 -1.23%, 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. Over the past three years, LBNDX's standard deviation comes in at 6.85%, compared to the category average of 13.49%. Looking at the past 5 years, the fund's standard deviation is 8.75% compared to the category average of 14.54%. 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, LBNDX has a positive alpha of 2.17, 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, LBNDX has 35.22% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 44.12%, giving LBNDX an average quality of BBB. This means that it focuses on medium quality securities.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, LBNDX is a load fund. It has an expense ratio of 0.78% compared to the category average of 0.95%. So, LBNDX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
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 similar performance, better downside risk, and lower fees, Lord Abbett Bond Debenture A ( LBNDX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the High Yield - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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