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Is LFRAX a Strong Bond Fund Right Now?

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If investors are looking at the Government - Bonds: Misc fund category, make sure to pass over Lord Abbett Floating Rate A (LFRAX - Free Report) . LFRAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.


We classify LFRAX in the Government - Bonds: Misc category, an area rife with potential choices. Government - Bonds: Misc funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category stretches across the curve, so the yields and interest rate sensitivity will vary, though a mixed approach generally results in a medium yield and risk profile.

History of Fund/Manager

LFRAX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Since Lord Abbett Floating Rate A made its debut in December of 2007, LFRAX has garnered more than $1.96 billion in assets. A team of investment professionals is the fund's current manager.


Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.93%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.92%, 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 14.44%, the standard deviation of LFRAX over the past three years is 9.61%. The fund's standard deviation over the past 5 years is 7.45% compared to the category average of 11.91%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.07, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LFRAX has a positive alpha of 1.99, which measures performance on a risk-adjusted basis.


Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, LFRAX is a load fund. It has an expense ratio of 0.80% compared to the category average of 0.84%. LFRAX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $1,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Lord Abbett Floating Rate A ( LFRAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on the Government - Bonds: Misc area of the mutual fund world, make sure to check out There, you can see more about the ranking process, and dive even deeper into LFRAX too 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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