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Is CXHYX a Strong Bond Fund Right Now?

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Mutual Fund Bond fund seekers should consider taking a look at Delaware National High Yield Municipals A (CXHYX - Free Report) . CXHYX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

CXHYX finds itself in the Delaware Investments family, 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 $247.03 million in assets, as of the most recently available information. 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 3.77%, and is 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 2.32%, 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 12.76%, the standard deviation of CXHYX over the past three years is 9.65%. Over the past 5 years, the standard deviation of the fund is 7.64% compared to the category average of 11.01%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 1.05, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, CXHYX has a positive alpha of 1.69, 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 has 12.09% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.

However, it is worth noting that 58 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.

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, CXHYX is a load fund. It has an expense ratio of 0.85% compared to the category average of 0.79%. So, CXHYX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to 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.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Bond, make sure to go to www.zacks.com/funds/mutual-funds 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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