Yahoo Finance Is MWTRX a Strong Bond Fund Right Now?
If you've been stuck searching for Mutual Fund Bond funds, you might want to consider passing on by Metropolitan West Total Retail Bond M (MWTRX) as a possibility. MWTRX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Metropolitan is based in Los Angeles, CA, and is the manager of MWTRX. Metropolitan West Total Retail Bond M made its debut in April of 1997, and since then, MWTRX has accumulated about $4.47 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -0.44%, and it sits in the bottom 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 -6.39%, 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. Compared to the category average of 12.7%, the standard deviation of MWTRX over the past three years is 7.07%. The standard deviation of the fund over the past 5 years is 6.31% compared to the category average of 13.45%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.1, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, MWTRX has a negative alpha of -0.16, 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, MWTRX has 61.4% in high quality bonds rated at least 'AA' or higher, while 29.79% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, MWTRX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 0.81%. Looking at the fund from a cost perspective, MWTRX is actually cheaper than its peers.
While the minimum initial investment for the product is $5,000, investors should also note that 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 weak performance, better downside risk, and lower fees, Metropolitan West Total Retail Bond M ( MWTRX ) 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 Mutual Fund Bond, 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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