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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 Putnam Diversified Income A (PDINX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
The world of Diversified Bonds funds is an area filled with options, such as PDINX. 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
Putnam Funds is responsible for PDINX, and the company is based out of Canton, MA. Putnam Diversified Income A debuted in October of 1988. Since then, PDINX has accumulated assets of about $890.57 million, according to the most recently available information. The fund is currently managed by 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 3.15%, and is in the middle 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 1.55%, which places it in the middle 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. PDINX's standard deviation over the past three years is 8.81% compared to the category average of 12.7%. Over the past 5 years, the standard deviation of the fund is 7.67% compared to the category average of 11.08%. This makes the fund less volatile than its peers over the past half-decade.
PDINX carries a beta of 0.4, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 2.49, 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, PDINX has 52.22% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 30.14%. This means that the fund has an average quality of A, 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, PDINX is a load fund. It has an expense ratio of 0.49% compared to the category average of 0.89%. Looking at the fund from a cost perspective, PDINX is actually cheaper than its peers.
This fund requires a minimum initial investment of $500, while there is no minimum for each subsequent investment.
Bottom Line
This could just be the start of your research on PDINXin the Diversified 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 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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Is PDINX a Strong Bond Fund Right Now?
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 Putnam Diversified Income A (PDINX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
The world of Diversified Bonds funds is an area filled with options, such as PDINX. 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
Putnam Funds is responsible for PDINX, and the company is based out of Canton, MA. Putnam Diversified Income A debuted in October of 1988. Since then, PDINX has accumulated assets of about $890.57 million, according to the most recently available information. The fund is currently managed by 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 3.15%, and is in the middle 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 1.55%, which places it in the middle 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. PDINX's standard deviation over the past three years is 8.81% compared to the category average of 12.7%. Over the past 5 years, the standard deviation of the fund is 7.67% compared to the category average of 11.08%. This makes the fund less volatile than its peers over the past half-decade.
PDINX carries a beta of 0.4, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 2.49, 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, PDINX has 52.22% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 30.14%. This means that the fund has an average quality of A, 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, PDINX is a load fund. It has an expense ratio of 0.49% compared to the category average of 0.89%. Looking at the fund from a cost perspective, PDINX is actually cheaper than its peers.
This fund requires a minimum initial investment of $500, while there is no minimum for each subsequent investment.
Bottom Line
This could just be the start of your research on PDINXin the Diversified 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 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.