There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that might be worth investigating is American Funds High Income Municipals Bond F (ABHFX Quick QuoteABHFX - Free Report) . ABHFX carries 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 Funds is based in Los Angeles, CA, and is the manager of ABHFX. Since American Funds High Income Municipals Bond F made its debut in September of 1994, ABHFX has garnered more than $97 million in assets. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. ABHFX has a 5-year annualized total return of 0.94% and is 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 -2.03%, 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. Compared to the category average of 13.02%, the standard deviation of ABHFX over the past three years is 7.75%. Over the past 5 years, the standard deviation of the fund is 7.71% compared to the category average of 13.85%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1, meaning that it is volatile than a broad market index of fixed income securities. Taking this into account, ABHFX has a positive alpha of 0.21, which measures performance on a risk-adjusted basis.

Ratings

However, it is worth noting that 35 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.

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, ABHFX is a no load fund. It has an expense ratio of 0.67% compared to the category average of 0.78%. So, ABHFX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $250, investors should also note that 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 Funds High Income Municipals Bond F ( ABHFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, American Funds High Income Municipals Bond F ( ABHFX ) 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 ABHFX to its peers as well 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.