Yahoo Finance Is MWTSX a Strong Bond Fund Right Now?
If you have been looking for Mutual Fund Bond funds, it would not be wise to start your search with Metropolitan West Total Retail Bond Plan (MWTSX). MWTSX holds 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 MWTSX. Metropolitan West Total Retail Bond Plan made its debut in August of 2011, and since then, MWTSX has accumulated about $16.82 billion in assets, per the most up-to-date date available. 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 has delivered a 5-year annualized total return of 0.76%, 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 -4.91%, 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, MWTSX's standard deviation comes in at 7.59%, compared to the category average of 12.95%. Over the past 5 years, the standard deviation of the fund is 6.62% compared to the category average of 13.43%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.09, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, MWTSX has a positive alpha of 0.18, 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, MWTSX 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, MWTSX is a no load fund. It has an expense ratio of 0.37% compared to the category average of 0.90%. So, MWTSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $25 million, and each subsequent investment should be at least $50,000.
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 Plan ( MWTSX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
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