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International Bond - Emerging fund seekers should consider taking a look at Eaton Vance Emerging Markets Local Income A (EEIAX - Free Report) . EEIAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
EEIAX is part of the International Bond - Emerging section, a segment that boasts an impressive array of other possible selections. International Bond - Emerging funds offer a unique type of geographic diversification by focusing on fixed income securities from emerging nations around the globe. With these funds, investors can expect exposure to economies such as China, Brazil, India, South Africa, and Indonesia, just to name a few. While this can be appealing, these funds can also introduce currency risk.
History of Fund/Manager
EEIAX finds itself in the Eaton Vance family, based out of Boston, MA. Eaton Vance Emerging Markets Local Income A made its debut in August of 2007, and since then, EEIAX has accumulated about $87.39 million in assets, per the most up-to-date date available. Michael A. Cirami is the fund's current manager and has held that role since January of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. EEIAX has a 5-year annualized total return of -0.63% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.8%, 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. EEIAX's standard deviation over the past three years is 11.25% compared to the category average of 8.39%. Over the past 5 years, the standard deviation of the fund is 11.05% compared to the category average of 8.31%. 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. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 8.83% means that a $10,000 investment should result in a yearly payout of $883.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. With a beta of 1.38, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, EEIAX has a negative alpha of -2.61, 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, EEIAX has 42.88% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 50.1%, giving EEIAX an average quality of BBB. This means that it focuses on medium 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, EEIAX is a load fund. It has an expense ratio of 1.26% compared to the category average of 1.18%. Looking at the fund from a cost perspective, EEIAX 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 has no minimum amount.
Bottom Line
Overall, Eaton Vance Emerging Markets Local Income A 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.
This could just be the start of your research on EEIAXin the International Bond - Emerging 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. 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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Is EEIAX a Strong Bond Fund Right Now?
International Bond - Emerging fund seekers should consider taking a look at Eaton Vance Emerging Markets Local Income A (EEIAX - Free Report) . EEIAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
EEIAX is part of the International Bond - Emerging section, a segment that boasts an impressive array of other possible selections. International Bond - Emerging funds offer a unique type of geographic diversification by focusing on fixed income securities from emerging nations around the globe. With these funds, investors can expect exposure to economies such as China, Brazil, India, South Africa, and Indonesia, just to name a few. While this can be appealing, these funds can also introduce currency risk.
History of Fund/Manager
EEIAX finds itself in the Eaton Vance family, based out of Boston, MA. Eaton Vance Emerging Markets Local Income A made its debut in August of 2007, and since then, EEIAX has accumulated about $87.39 million in assets, per the most up-to-date date available. Michael A. Cirami is the fund's current manager and has held that role since January of 2008.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. EEIAX has a 5-year annualized total return of -0.63% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.8%, 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. EEIAX's standard deviation over the past three years is 11.25% compared to the category average of 8.39%. Over the past 5 years, the standard deviation of the fund is 11.05% compared to the category average of 8.31%. 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. This metric takes a look at the average payout by the fund in a given year. For example, this fund's average coupon of 8.83% means that a $10,000 investment should result in a yearly payout of $883.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks. With a beta of 1.38, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, EEIAX has a negative alpha of -2.61, 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, EEIAX has 42.88% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 50.1%, giving EEIAX an average quality of BBB. This means that it focuses on medium 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, EEIAX is a load fund. It has an expense ratio of 1.26% compared to the category average of 1.18%. Looking at the fund from a cost perspective, EEIAX 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 has no minimum amount.
Bottom Line
Overall, Eaton Vance Emerging Markets Local Income A 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.
This could just be the start of your research on EEIAXin the International Bond - Emerging 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. 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.