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If investors are looking at the Diversified Bonds fund category, make sure to pass over Putnam Diversified Income A (PDINX - Free Report) . PDINX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Diversified Bonds funds is an area filled with options, such as PDINX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDINX. Putnam Diversified Income A debuted in October of 1988. Since then, PDINX has accumulated assets of about $528.21 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. PDINX has a 5-year annualized total return of 0.65% and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 1.5%, which places it in the middle 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. PDINX's standard deviation over the past three years is 5.33% compared to the category average of 12.71%. The standard deviation of the fund over the past 5 years is 7.91% compared to the category average of 13.63%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.44, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a negative alpha of -0.29, 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, PDINX has 43.87% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 31.33%. This means that the fund has an average quality of A, 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, PDINX is a load fund. It has an expense ratio of 0.52% compared to the category average of 1%. PDINX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $500, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, better downside risk, and lower fees, Putnam Diversified Income A ( PDINX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Your research on the Diversified Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.
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Is PDINX a Strong Bond Fund Right Now?
If investors are looking at the Diversified Bonds fund category, make sure to pass over Putnam Diversified Income A (PDINX - Free Report) . PDINX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Diversified Bonds funds is an area filled with options, such as PDINX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDINX. Putnam Diversified Income A debuted in October of 1988. Since then, PDINX has accumulated assets of about $528.21 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. PDINX has a 5-year annualized total return of 0.65% and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 1.5%, which places it in the middle 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. PDINX's standard deviation over the past three years is 5.33% compared to the category average of 12.71%. The standard deviation of the fund over the past 5 years is 7.91% compared to the category average of 13.63%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.44, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a negative alpha of -0.29, 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, PDINX has 43.87% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 31.33%. This means that the fund has an average quality of A, 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, PDINX is a load fund. It has an expense ratio of 0.52% compared to the category average of 1%. PDINX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $500, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, better downside risk, and lower fees, Putnam Diversified Income A ( PDINX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Your research on the Diversified Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.