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Is American Beacon Sound Point Floating Rate Institutional (SPFLX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Mutual Fund Equity Report funds, it would not be wise to start your search with American Beacon Sound Point Floating Rate Institutional (SPFLX - Free Report) . SPFLX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Beacon is responsible for SPFLX, and the company is based out of Irving, TX. Since American Beacon Sound Point Floating Rate Institutional made its debut in December of 2015, SPFLX has garnered more than $119.70 million in assets. 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 1.21%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.73%, which places it in the bottom 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 SPFLX over the past three years is 10.75% compared to the category average of 15.62%. Over the past 5 years, the standard deviation of the fund is 8.45% compared to the category average of 13.55%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.25, the fund is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a positive alpha over the past 5 years of 0.58, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, SPFLX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 0.79%. So, SPFLX 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 $250,000; each subsequent investment needs to be at least $50.

Bottom Line

Overall, American Beacon Sound Point Floating Rate Institutional ( SPFLX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

Want even more information about SPFLX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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