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Is PDBZX a Strong Bond Fund Right Now?

Zacks Equity Research
·4 min read

There are plenty of choices in the Diversified Bonds category, but where should you start your research? Well, one fund that might be worth investigating is PGIM Total Return Bond Z (PDBZX). PDBZX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Diversified Bonds funds is an area filled with options, such as PDBZX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.

History of Fund/Manager

PDBZX finds itself in the PGIM family, based out of Providence, RI. PGIM Total Return Bond Z debuted in September of 1996. Since then, PDBZX has accumulated assets of about $32.82 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

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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 4.19%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 5.43%, which places it in the bottom 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. Over the past three years, PDBZX's standard deviation comes in at 5.94%, compared to the category average of 13.49%. Looking at the past 5 years, the fund's standard deviation is 5.13% compared to the category average of 11.21%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.3, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, PDBZX has a positive alpha of 0.42, 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, PDBZX has 41.9% in high quality bonds rated at least 'AA' or higher, while 34.9% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, 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, PDBZX is a no load fund. It has an expense ratio of 0.49% compared to the category average of 0.86%. PDBZX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, PGIM Total Return Bond Z ( PDBZX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund looks like a great potential choice for investors right now.

Want even more information about PDBZX? 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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