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On the lookout for a Muni - Bonds fund? Starting with Colorado Bond Shares Tax-Exempt A (HICOX - Free Report) is one possibility. HICOX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes HICOX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.
History of Fund/Manager
HICOX is a part of the Freedom Funds family of funds, a company based out of Denver, CO. Since Colorado Bond Shares Tax-Exempt A made its debut in June of 1987, HICOX has garnered more than $1.14 billion in assets. The fund is currently managed by Fred R. Kelly who has been in charge of the fund since November of 1990.
Performance
Of course, investors look for strong performance in funds. HICOX has a 5-year annualized total return of 4.04% and is in the top 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 4.33%, 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. HICOX's standard deviation over the past three years is 1.49% compared to the category average of 2.95%. Over the past 5 years, the standard deviation of the fund is 4.17% compared to the category average of 3.56%. This makes the fund more volatile than its peers over the past half-decade.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 5.06% means that a $10,000 investment should result in a yearly payout of $506.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. HICOX carries a beta of 0.32, 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 2.86, which measures performance on a risk-adjusted basis.
However, it is worth noting that 53 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, HICOX is a load fund. It has an expense ratio of 0.61% compared to the category average of 0.88%. HICOX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Colorado Bond Shares Tax-Exempt A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Colorado Bond Shares Tax-Exempt A looks like a good potential choice for investors right now.
For additional information on the Muni - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into HICOX too 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 HICOX a Strong Bond Fund Right Now?
On the lookout for a Muni - Bonds fund? Starting with Colorado Bond Shares Tax-Exempt A (HICOX - Free Report) is one possibility. HICOX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes HICOX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.
History of Fund/Manager
HICOX is a part of the Freedom Funds family of funds, a company based out of Denver, CO. Since Colorado Bond Shares Tax-Exempt A made its debut in June of 1987, HICOX has garnered more than $1.14 billion in assets. The fund is currently managed by Fred R. Kelly who has been in charge of the fund since November of 1990.
Performance
Of course, investors look for strong performance in funds. HICOX has a 5-year annualized total return of 4.04% and is in the top 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 4.33%, 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. HICOX's standard deviation over the past three years is 1.49% compared to the category average of 2.95%. Over the past 5 years, the standard deviation of the fund is 4.17% compared to the category average of 3.56%. This makes the fund more volatile than its peers over the past half-decade.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 5.06% means that a $10,000 investment should result in a yearly payout of $506.
A higher coupon is good for those seeking a strong level of current income, but it could also pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. HICOX carries a beta of 0.32, 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 2.86, which measures performance on a risk-adjusted basis.
However, it is worth noting that 53 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, HICOX is a load fund. It has an expense ratio of 0.61% compared to the category average of 0.88%. HICOX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Colorado Bond Shares Tax-Exempt A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Colorado Bond Shares Tax-Exempt A looks like a good potential choice for investors right now.
For additional information on the Muni - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into HICOX too 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.