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Any investors hoping to find a Mutual Fund Bond fund might consider looking past T. Rowe Price Tax Free Income Adviser (PATAX - Free Report) . PATAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PATAX. Since T. Rowe Price Tax Free Income Adviser made its debut in October of 1976, PATAX has garnered more than $72 million in assets. The fund is currently managed by Konstantine B. Mallas who has been in charge of the fund since July of 2007.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 2.93%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.71%, 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. PATAX's standard deviation over the past three years is 4.73% compared to the category average of 11.81%. The standard deviation of the fund over the past 5 years is 4.23% compared to the category average of 9.91%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.64, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PATAX has a negative alpha of -0.57, 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, PATAX has 43% in high quality bonds rated at least 'AA' or higher, while 46.08% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, PATAX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 0.80%. So, PATAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Bottom Line
Overall, T. Rowe Price Tax Free Income Adviser ( PATAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PATAX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is PATAX a Strong Bond Fund Right Now?
Any investors hoping to find a Mutual Fund Bond fund might consider looking past T. Rowe Price Tax Free Income Adviser (PATAX - Free Report) . PATAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
T. Rowe Price is based in Baltimore, MD, and is the manager of PATAX. Since T. Rowe Price Tax Free Income Adviser made its debut in October of 1976, PATAX has garnered more than $72 million in assets. The fund is currently managed by Konstantine B. Mallas who has been in charge of the fund since July of 2007.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 2.93%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.71%, 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. PATAX's standard deviation over the past three years is 4.73% compared to the category average of 11.81%. The standard deviation of the fund over the past 5 years is 4.23% compared to the category average of 9.91%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.64, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PATAX has a negative alpha of -0.57, 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, PATAX has 43% in high quality bonds rated at least 'AA' or higher, while 46.08% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.
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, PATAX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 0.80%. So, PATAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Bottom Line
Overall, T. Rowe Price Tax Free Income Adviser ( PATAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare PATAX to its peers as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.