Back to top

Image: Bigstock

Is NTHEX a Strong Bond Fund Right Now?

Read MoreHide Full Article

If investors are looking at the High Yield - Bonds fund category, make sure to pass over Northeast Investors Trust (NTHEX - Free Report) . NTHEX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

NTHEX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.

History of Fund/Manager

Northeast is based in Boston, MA, and is the manager of NTHEX. Since Northeast Investors Trust made its debut in March of 1950, NTHEX has garnered more than $303.92 million in assets. The fund is currently managed by Ernest E. Monrad who has been in charge of the fund since June of 1960.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 0.04%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.18%, 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. Compared to the category average of 4.75%, the standard deviation of NTHEX over the past three years is 11.23%. Looking at the past 5 years, the fund's standard deviation is 10.17% compared to the category average of 4.7%. This makes the fund more volatile than its peers over the past half-decade.

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, NTHEX is a no load fund. It has an expense ratio of 0.13% compared to the category average of 1.03%. Looking at the fund from a cost perspective, NTHEX is actually cheaper than its peers.

This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Northeast Investors Trust has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Want even more information about NTHEX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Northeast Investors Trust (NTHEX) - free report >>