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Is MDCMX a Strong Bond Fund Right Now?

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If investors are looking at the Muni - Bonds fund category, BlackRock CA Municipals Opportunities A1 (MDCMX - Free Report) could be a potential option. MDCMX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

MDCMX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of MDCMX. BlackRock CA Municipals Opportunities A1 made its debut in October of 1994, and since then, MDCMX has accumulated about $103.61 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 3.42%, 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 3.98%, which places it in the top 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 12.72%, the standard deviation of MDCMX over the past three years is 5.45%. Looking at the past 5 years, the fund's standard deviation is 4.78% compared to the category average of 10.67%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.29, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, MDCMX has a negative alpha of -0.19, which measures performance on a risk-adjusted basis.

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, MDCMX is a no load fund. It has an expense ratio of 0.53% compared to the category average of 0.80%. Looking at the fund from a cost perspective, MDCMX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Bottom Line

Overall, BlackRock CA Municipals Opportunities A1 ( MDCMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, BlackRock CA Municipals Opportunities A1 ( MDCMX ) looks like a good potential choice for investors right now.

Want even more information about MDCMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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