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Is DBLTX a Strong Bond Fund Right Now?

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If investors are looking at the Government Mortgage - Intermediate fund category, make sure to pass over DoubleLine Total Return Bond I (DBLTX - Free Report) . DBLTX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Government Mortgage - Intermediate funds is an area filled with choices, such as DBLTX. A mortgage-backed security (MBS) is a type of asset-backed security that packages mortgages together and then sells off the pooled securities. Government Mortgage - Intermediate funds focus on this market; this fund category presents a medium risk and yield profile, and concentrates on MBS with at least three years to maturity but less than 10.

History of Fund/Manager

Double Line is based in Los Angeles, CA, and is the manager of DBLTX. DoubleLine Total Return Bond I made its debut in April of 2010, and since then, DBLTX has accumulated about $43.39 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.3%, and is 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 3.67%, 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, DBLTX's standard deviation comes in at 3.46%, compared to the category average of 9.25%. Looking at the past 5 years, the fund's standard deviation is 2.94% compared to the category average of 8.08%. This makes the fund less volatile than its peers over the past half-decade.

DBLTX carries a beta of 0.81, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.02, 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, DBLTX has 65.86% in high quality bonds rated at least 'AA' or higher. 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, DBLTX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.82%. Looking at the fund from a cost perspective, DBLTX is actually cheaper than its peers.

While the minimum initial investment for the product is $100,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, DoubleLine Total Return Bond I ( DBLTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Government Mortgage - Intermediate funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare DBLTX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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