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If investors are looking at the High Yield - Bonds fund category, make sure to pass over Lord Abbett Bond Debenture A (LBNDX - Free Report) . LBNDX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that LBNDX 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
LBNDX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Since Lord Abbett Bond Debenture A made its debut in April of 1971, LBNDX has garnered more than $5.25 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.58%, and is in the top 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 2.7%, 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 12.06%, the standard deviation of LBNDX over the past three years is 8.89%. The standard deviation of the fund over the past 5 years is 7.68% compared to the category average of 10.98%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.91, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LBNDX has a positive alpha of 0.86, 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, LBNDX has 41.66% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 42.09%, giving LBNDX 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, LBNDX is a load fund. It has an expense ratio of 0.79% compared to the category average of 1.02%. Looking at the fund from a cost perspective, LBNDX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Lord Abbett Bond Debenture A ( LBNDX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Lord Abbett Bond Debenture A ( LBNDX ) looks like a somewhat weak choice for investors right now.
Your research on the High Yield - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is LBNDX a Strong Bond Fund Right Now?
If investors are looking at the High Yield - Bonds fund category, make sure to pass over Lord Abbett Bond Debenture A (LBNDX - Free Report) . LBNDX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that LBNDX 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
LBNDX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Since Lord Abbett Bond Debenture A made its debut in April of 1971, LBNDX has garnered more than $5.25 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 3.58%, and is in the top 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 2.7%, 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 12.06%, the standard deviation of LBNDX over the past three years is 8.89%. The standard deviation of the fund over the past 5 years is 7.68% compared to the category average of 10.98%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.91, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LBNDX has a positive alpha of 0.86, 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, LBNDX has 41.66% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 42.09%, giving LBNDX 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, LBNDX is a load fund. It has an expense ratio of 0.79% compared to the category average of 1.02%. Looking at the fund from a cost perspective, LBNDX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Lord Abbett Bond Debenture A ( LBNDX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Lord Abbett Bond Debenture A ( LBNDX ) looks like a somewhat weak choice for investors right now.
Your research on the High Yield - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.