We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
If investors are looking at the High Yield - Bonds fund category, make sure to pass over Ivy High Income A (WHIAX - Free Report) . WHIAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that WHIAX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
WHIAX finds itself in the Ivy Funds family, based out of Boca Raton, FL. Ivy High Income A made its debut in September of 2003, and since then, WHIAX has accumulated about $1.93 billion in assets, per the most up-to-date date available. The fund's current manager, Chad A. Gunther, has been in charge of the fund since July of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.93%, and it sits in the bottom 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 5.24%, 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 -16.12%, the standard deviation of WHIAX over the past three years is 4.35%. Looking at the past 5 years, the fund's standard deviation is 5.69% compared to the category average of -24.71%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. WHIAX has a modified duration of 3.3, which suggests that the fund will decline 3.3% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.57% means that a $10,000 investment should result in a yearly payout of $757.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 0.17, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, WHIAX has a positive alpha of 3.12, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, WHIAX is a load fund. It has an expense ratio of 0.95% compared to the category average of 0.48%. So, WHIAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $750, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy High Income A ( WHIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, Ivy High Income A ( WHIAX ) looks like a somewhat weak 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. 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is WHIAX a Strong Bond Fund Right Now?
If investors are looking at the High Yield - Bonds fund category, make sure to pass over Ivy High Income A (WHIAX - Free Report) . WHIAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that WHIAX is a High Yield - Bonds option, which is an area loaded with different investment choices. High Yield - Bonds funds are often known as " junk " bonds since they are below investment grade. This means they are at an elevated risk of default, at least when compared to their investment grade peers. On the plus side, junk bonds generally pay out higher yields, all while posing similar interest rate risks as we see with their investment grade counterparts.
History of Fund/Manager
WHIAX finds itself in the Ivy Funds family, based out of Boca Raton, FL. Ivy High Income A made its debut in September of 2003, and since then, WHIAX has accumulated about $1.93 billion in assets, per the most up-to-date date available. The fund's current manager, Chad A. Gunther, has been in charge of the fund since July of 2014.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.93%, and it sits in the bottom 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 5.24%, 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 -16.12%, the standard deviation of WHIAX over the past three years is 4.35%. Looking at the past 5 years, the fund's standard deviation is 5.69% compared to the category average of -24.71%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. WHIAX has a modified duration of 3.3, which suggests that the fund will decline 3.3% for every hundred-basis-point increase in interest rates.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always important to consider the fund's average coupon. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.57% means that a $10,000 investment should result in a yearly payout of $757.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 0.17, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, WHIAX has a positive alpha of 3.12, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, WHIAX is a load fund. It has an expense ratio of 0.95% compared to the category average of 0.48%. So, WHIAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $750, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy High Income A ( WHIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, Ivy High Income A ( WHIAX ) looks like a somewhat weak 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. 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.