Yahoo Finance Is PTTRX a Strong Bond Fund Right Now?
Any investors hoping to find a Mutual Fund Bond fund might consider looking past PIMCO Total Return Institutional (PTTRX). PTTRX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PIMCO Funds is based in Newport Beach, CA, and is the manager of PTTRX. The PIMCO Total Return Institutional made its debut in May of 1987 and PTTRX has managed to accumulate roughly $40.75 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of -0.12%, and it sits 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 -5.51%, 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. PTTRX's standard deviation over the past three years is 6.39% compared to the category average of 13.16%. The fund's standard deviation over the past 5 years is 5.79% compared to the category average of 13.98%. This makes the fund less volatile than its peers over the past half-decade.
PTTRX carries a beta of 1, meaning that the fund is volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.04, 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, PTTRX has 73% in high quality bonds rated at least 'AA' or higher, while 20.2% 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
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, PTTRX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 0.75%. From a cost perspective, PTTRX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1 million, 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, PIMCO Total Return Institutional ( PTTRX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
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