Mutual Fund Bond fund seekers should consider taking a look at American Century CA High Yield Municipals A (CAYAX Quick QuoteCAYAX - Free Report) . CAYAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Century is based in Kansas City, MO, and is the manager of CAYAX. American Century CA High Yield Municipals A debuted in January of 2003. Since then, CAYAX has accumulated assets of about $47.30 million, according to the most recently available information. The fund is currently managed by Joseph Gotelli who has been in charge of the fund since January of 2012.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0%, and is 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 -3.66%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 CAYAX over the past three years is 7.71% compared to the category average of 12.94%. Over the past 5 years, the standard deviation of the fund is 7.59% compared to the category average of 13.62%. This makes the fund less volatile than its peers over the past half-decade.

CAYAX carries a beta of 1, meaning that the fund is volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.73, which measures performance on a risk-adjusted basis.

Ratings

However, it is worth noting that 48 % 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, CAYAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.78%. From a cost perspective, CAYAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, American Century CA High Yield Municipals A ( CAYAX ) 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.

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.