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Is USHYX a Strong Bond Fund Right Now?

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There are plenty of choices in the High Yield - Bonds category, but where should you start your research? Well, one fund that you should consider investigating is USAA High Income (USHYX - Free Report) . USHYX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that USHYX 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

Victory is based in Cleveland, OH, and is the manager of USHYX. The USAA High Income made its debut in August of 1999 and USHYX has managed to accumulate roughly $979.66 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. USHYX has a 5-year annualized total return of 4.75% 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 2.18%, 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. The standard deviation of USHYX over the past three years is 10.95% compared to the category average of 12.8%. The standard deviation of the fund over the past 5 years is 9.31% compared to the category average of 11.08%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.66, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, USHYX has a positive alpha of 2.31, 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, USHYX is a no load fund. It has an expense ratio of 0.81% compared to the category average of 1.01%. USHYX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $3,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, USAA High Income ( USHYX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, USAA High Income ( USHYX ) looks like a somewhat average 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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