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Is CXHYX a Strong Bond Fund Right Now?

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If you have been looking for Muni - Bonds funds, a place to start could be Delaware National High Yield Municipals A (CXHYX - Free Report) . CXHYX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes CXHYX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.

History of Fund/Manager

CXHYX is a part of the Delaware Investments family of funds, a company based out of Philadelphia, PA. The Delaware National High Yield Municipals A made its debut in September of 1986 and CXHYX has managed to accumulate roughly $231.47 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.6%, 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 6.78%, 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. The standard deviation of CXHYX over the past three years is 8.8% compared to the category average of 12.39%. Over the past 5 years, the standard deviation of the fund is 7.41% compared to the category average of 10.34%. This makes the fund less volatile than its peers over the past half-decade.

CXHYX carries a beta of 0.98, 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 0.66, 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, CXHYX 's junk bond component-bonds rated 'BB' or below-is at 22.23%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.

However, it is worth noting that 44 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.

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, CXHYX is a load fund. It has an expense ratio of 0.85% compared to the category average of 0.80%. So, CXHYX is actually more expensive than its peers from a cost perspective.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $100.

Bottom Line

Overall, Delaware National High Yield Municipals A ( CXHYX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.

Want even more information about CXHYX? 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. 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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