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High Yield - Bonds fund seekers should not consider taking a look at AB High Income Fund C (AGDCX - Free Report) at this time. AGDCX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that AGDCX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
AllianceBernstein is based in New York, NY, and is the manager of AGDCX. AB High Income Fund C debuted in February of 1994. Since then, AGDCX has accumulated assets of about $520.26 million, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0.75%, and is in the bottom 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 -1.98%, 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, AGDCX's standard deviation comes in at 11.9%, compared to the category average of 12.01%. The fund's standard deviation over the past 5 years is 10.01% compared to the category average of 10.98%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.86, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, AGDCX has a negative alpha of -1.57, 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, AGDCX 's junk bond component-bonds rated 'BB' or below-is at 55.98%. This means that the fund has an average quality of BBB, and focuses on medium 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, AGDCX is a no load fund. It has an expense ratio of 1.62% compared to the category average of 1.02%. AGDCX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, AB High Income Fund C ( AGDCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on AGDCXin the High Yield - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is AGDCX a Strong Bond Fund Right Now?
High Yield - Bonds fund seekers should not consider taking a look at AB High Income Fund C (AGDCX - Free Report) at this time. AGDCX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that AGDCX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
AllianceBernstein is based in New York, NY, and is the manager of AGDCX. AB High Income Fund C debuted in February of 1994. Since then, AGDCX has accumulated assets of about $520.26 million, according to the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0.75%, and is in the bottom 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 -1.98%, 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, AGDCX's standard deviation comes in at 11.9%, compared to the category average of 12.01%. The fund's standard deviation over the past 5 years is 10.01% compared to the category average of 10.98%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.86, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, AGDCX has a negative alpha of -1.57, 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, AGDCX 's junk bond component-bonds rated 'BB' or below-is at 55.98%. This means that the fund has an average quality of BBB, and focuses on medium 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, AGDCX is a no load fund. It has an expense ratio of 1.62% compared to the category average of 1.02%. AGDCX is actually more expensive than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, AB High Income Fund C ( AGDCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.
This could just be the start of your research on AGDCXin the High Yield - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.