Yahoo Finance Is FATRX a Strong Bond Fund Right Now?
Having trouble finding an Investment Grade - Bonds: Misc fund? Frost Total Return Bond Investor (FATRX) is a potential starting point. FATRX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify FATRX in the Investment Grade - Bonds: Misc, as area rife with many potential choices. Investment Grade - Bonds: Misc funds are not focused on one part of the curve and often hold a variety of investment grade credit levels. However, this means that funds in this category may not be directly comparable, and duration risk will depend on a given fund's profile. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.
History of Fund/Manager
Frost Funds is based in San Antonio, Tx, and is the manager of FATRX. The Frost Total Return Bond Investor made its debut in July of 2008 and FATRX has managed to accumulate roughly $212.37 million in assets, as of the most recently available information. The fund's current manager, Jeffery Elswick, has been in charge of the fund since July of 2008.
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 2.54%, and is in the top 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 2.22%, which places it in the top 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. Compared to the category average of 10.45%, the standard deviation of FATRX over the past three years is 4.43%. The standard deviation of the fund over the past 5 years is 5.05% compared to the category average of 11.17%. This makes the fund less volatile than its peers over the past half-decade.
FATRX carries a beta of 0.5, 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 1.71, 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, FATRX has 70.66% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AA, and focuses on high quality securities.
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, FATRX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.82%. FATRX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $500.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Frost Total Return Bond Investor ( FATRX ) 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.
Want even more information about FATRX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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