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Is FATRX a Strong Bond Fund Right Now?

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Having trouble finding a Mutual Fund Bond fund? Frost Total Return Bond Investor (FATRX - Free Report) is a potential starting point. FATRX 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

Frost Funds is based in San Antonio, Tx, and is the manager of FATRX. Frost Total Return Bond Investor made its debut in July of 2008, and since then, FATRX has accumulated about $314.79 million in assets, per the most up-to-date date available. Jeffery Elswick is the fund's current manager and has held that role since July of 2008.

Performance

Of course, investors look for strong performance in funds. FATRX has a 5-year annualized total return of 1.93% 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 1.23%, 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. FATRX's standard deviation over the past three years is 5.04% compared to the category average of 11.03%. The fund's standard deviation over the past 5 years is 3.99% compared to the category average of 9.76%. This makes the fund less volatile than its peers over the past half-decade.

FATRX carries a beta of 0.34, 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 0.86, 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, FATRX has 60.96% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AA, 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, FATRX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.89%. FATRX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $500.

Bottom Line

Overall, Frost Total Return Bond Investor ( FATRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into FATRX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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