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Is THOPX a Strong Bond Fund Right Now?

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Any investors hoping to find an Investment Grade Bond - Short fund could think about starting with Thompson Bond Fund (THOPX - Free Report) . THOPX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

THOPX is classified in the Investment Grade Bond - Short segment by Zacks, an area full of investment potential. By investing in bonds that mature in less than two years, Investment Grade Bond - Short funds are focused on the short end of the curve. Fixed income instruments at this maturity level tend to have low duration risk, but they also pay out small yields compared to their longer-dated peers. Furthermore, these funds'focus on investment grade make them safer, but yields will be lower than in the junk bond category.

History of Fund/Manager

Thompson is based in Madison, WI, and is the manager of THOPX. Since Thompson Bond Fund made its debut in February of 1992, THOPX has garnered more than $2.53 billion in assets. The fund is currently managed by Jason Stephens who has been in charge of the fund since February of 2009.

Performance

Of course, investors look for strong performance in funds. THOPX has a 5-year annualized total return of 2.9% and it sits 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 0.96%, which places it in the bottom 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. THOPX's standard deviation over the past three years is 6.23% compared to the category average of 2.77%. Over the past 5 years, the standard deviation of the fund is 5.6% compared to the category average of 2.33%. This makes the fund more volatile than its peers over the past half-decade.

THOPX carries a beta of 0.46, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.9, which measures performance on a risk-adjusted basis.

Ratings

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, THOPX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.75%. So, THOPX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, Thompson Bond Fund ( THOPX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Thompson Bond Fund ( THOPX ) looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Short, 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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