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Is PIMIX a Strong Bond Fund Right Now?

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If you have been looking for Mutual Fund Bond funds, a place to start could be PIMCO Income Institutional (PIMIX - Free Report) . PIMIX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

PIMCO Funds is based in Newport Beach, CA, and is the manager of PIMIX. PIMCO Income Institutional debuted in April of 2007. Since then, PIMIX has accumulated assets of about $67.63 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 1.86%, and it sits in the middle 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 0.05%, 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. The standard deviation of PIMIX over the past three years is 6.53% compared to the category average of 14.29%. Looking at the past 5 years, the fund's standard deviation is 5.16% compared to the category average of 12.7%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.3, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PIMIX has a positive alpha of 0.99, 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, PIMIX has 42.28% in high quality bonds rated at least 'AA' or higher, while 23.74% are of medium quality, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 33.47%, giving PIMIX an average quality of A. This means that it focuses on high quality securities.

Expenses

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, PIMIX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.83%. From a cost perspective, PIMIX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.

Bottom Line

Overall, PIMCO Income Institutional ( PIMIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund looks like a good 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 PIMIX to its peers as well 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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