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There are plenty of choices in the Government Mortgage - Intermediate category, but where should you start your research? Well, one fund that may not be worth investigating is DoubleLine Total Return Bond I (DBLTX - Free Report) . DBLTX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify DBLTX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
History of Fund/Manager
DBLTX is a part of the Double Line family of funds, a company based out of Los Angeles, CA. DoubleLine Total Return Bond I made its debut in April of 2010, and since then, DBLTX has accumulated about $47.51 billion in assets, per the most up-to-date date available. The fund's current manager, Philip A. Barach, has been in charge of the fund since April of 2010.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.4%, 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 3.4%, which places it in the top third during this time-frame.
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.
If you believe interest rates will rise, this is an important factor to look at. DBLTX has a modified duration of 3.76, which suggests that the fund will decline 3.76% for every hundred-basis-point increase in interest rates.
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 3.62% means that a $10,000 investment should result in a yearly payout of $362.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. With a beta of 0.68, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, DBLTX has a positive alpha of 0.87, 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, DBLTX has 70.01% 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, DBLTX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.05%. From a cost perspective, DBLTX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $100.
Bottom Line
With a 'strong sell' rank, DoubleLine Total Return Bond I is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Government Mortgage - Intermediate right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in DBLTX turnaround in the next data release.
For additional information on this product, or to compare it to other mutual funds in the Government Mortgage - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is DBLTX a Strong Bond Fund Right Now?
There are plenty of choices in the Government Mortgage - Intermediate category, but where should you start your research? Well, one fund that may not be worth investigating is DoubleLine Total Return Bond I (DBLTX - Free Report) . DBLTX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify DBLTX in the Government Mortgage - Intermediate category, an area full of potential choices. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Honing in on MBS'that have at least three years to maturity but less than 10, this fund category presents a medium risk and yield profile.
History of Fund/Manager
DBLTX is a part of the Double Line family of funds, a company based out of Los Angeles, CA. DoubleLine Total Return Bond I made its debut in April of 2010, and since then, DBLTX has accumulated about $47.51 billion in assets, per the most up-to-date date available. The fund's current manager, Philip A. Barach, has been in charge of the fund since April of 2010.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 3.4%, 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 3.4%, which places it in the top third during this time-frame.
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.
If you believe interest rates will rise, this is an important factor to look at. DBLTX has a modified duration of 3.76, which suggests that the fund will decline 3.76% for every hundred-basis-point increase in interest rates.
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 3.62% means that a $10,000 investment should result in a yearly payout of $362.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. With a beta of 0.68, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, DBLTX has a positive alpha of 0.87, 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, DBLTX has 70.01% 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, DBLTX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.05%. From a cost perspective, DBLTX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $100.
Bottom Line
With a 'strong sell' rank, DoubleLine Total Return Bond I is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Government Mortgage - Intermediate right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in DBLTX turnaround in the next data release.
For additional information on this product, or to compare it to other mutual funds in the Government Mortgage - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.