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If you're looking for a High Yield - Bonds fund category, then a potential option is Thrivent High Yield Fund A (LBHYX - Free Report) . LBHYX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LBHYX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Thrivent is based in Appleton, WI, and is the manager of LBHYX. The Thrivent High Yield Fund A made its debut in April of 1987 and LBHYX has managed to accumulate roughly $447.70 million in assets, as of the most recently available information. Paul J. Ocenasek is the fund's current manager and has held that role since December of 1997.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.8%, and it sits in the middle 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 3.55%, which places it in the middle 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 6.73%, the standard deviation of LBHYX over the past three years is 4.88%. The fund's standard deviation over the past 5 years is 4.72% compared to the category average of 6.61%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. LBHYX has a modified duration of 4, which suggests that the fund will decline 4% for every hundred-basis-point increase in interest rates.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.13% means that a $10,000 investment should result in a yearly payout of $613.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur 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. With a beta of 0.39, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LBHYX has a positive alpha of 2.71, which measures performance on a risk-adjusted basis.
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, LBHYX is a load fund. It has an expense ratio of 0.80% compared to the category average of 1.04%. Looking at the fund from a cost perspective, LBHYX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Thrivent High Yield Fund A has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the High Yield - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is LBHYX a Strong Bond Fund Right Now?
If you're looking for a High Yield - Bonds fund category, then a potential option is Thrivent High Yield Fund A (LBHYX - Free Report) . LBHYX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LBHYX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Thrivent is based in Appleton, WI, and is the manager of LBHYX. The Thrivent High Yield Fund A made its debut in April of 1987 and LBHYX has managed to accumulate roughly $447.70 million in assets, as of the most recently available information. Paul J. Ocenasek is the fund's current manager and has held that role since December of 1997.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.8%, and it sits in the middle 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 3.55%, which places it in the middle 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 6.73%, the standard deviation of LBHYX over the past three years is 4.88%. The fund's standard deviation over the past 5 years is 4.72% compared to the category average of 6.61%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. LBHYX has a modified duration of 4, which suggests that the fund will decline 4% for every hundred-basis-point increase in interest rates.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 6.13% means that a $10,000 investment should result in a yearly payout of $613.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur 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. With a beta of 0.39, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LBHYX has a positive alpha of 2.71, which measures performance on a risk-adjusted basis.
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, LBHYX is a load fund. It has an expense ratio of 0.80% compared to the category average of 1.04%. Looking at the fund from a cost perspective, LBHYX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Thrivent High Yield Fund A has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the High Yield - Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.