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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 PIMCO Commodity Real Retail Strategy A (PCRAX - Free Report) . PCRAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PCRAX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
PCRAX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. The PIMCO Commodity Real Retail Strategy A made its debut in June of 2002 and PCRAX has managed to accumulate roughly $225.47 million 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 in particular has delivered a 5-year annualized total return of 2.48%, and is in the top 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 -1.1%, which places it in the top 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. PCRAX's standard deviation over the past three years is 17.68% compared to the category average of 15.12%. The standard deviation of the fund over the past 5 years is 15.23% compared to the category average of 12.95%. This makes the fund more volatile than its peers over the past half-decade.
With a beta of -0.42, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PCRAX has a positive alpha of 2.8, 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, PCRAX has 84% 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, PCRAX is a load fund. It has an expense ratio of 1.18% compared to the category average of 0.88%. From a cost perspective, PCRAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, PIMCO Commodity Real Retail Strategy A ( PCRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Your research on the Diversified Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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 PCRAX 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 PIMCO Commodity Real Retail Strategy A (PCRAX - Free Report) . PCRAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PCRAX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
PCRAX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. The PIMCO Commodity Real Retail Strategy A made its debut in June of 2002 and PCRAX has managed to accumulate roughly $225.47 million 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 in particular has delivered a 5-year annualized total return of 2.48%, and is in the top 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 -1.1%, which places it in the top 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. PCRAX's standard deviation over the past three years is 17.68% compared to the category average of 15.12%. The standard deviation of the fund over the past 5 years is 15.23% compared to the category average of 12.95%. This makes the fund more volatile than its peers over the past half-decade.
With a beta of -0.42, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PCRAX has a positive alpha of 2.8, 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, PCRAX has 84% 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, PCRAX is a load fund. It has an expense ratio of 1.18% compared to the category average of 0.88%. From a cost perspective, PCRAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, PIMCO Commodity Real Retail Strategy A ( PCRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Your research on the Diversified Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.