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If investors are looking at the Muni - Bonds fund category, American Century CA High Yield Municipals A (CAYAX - Free Report) could be a potential option. CAYAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
CAYAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
CAYAX finds itself in the American Century family, based out of Kansas City, MO. American Century CA High Yield Municipals A made its debut in January of 2003, and since then, CAYAX has accumulated about $48.13 million in assets, per the most up-to-date date available. 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 carries a 5-year annualized total return of 0.81%, and it sits in the middle 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 -0.9%, 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. The standard deviation of CAYAX over the past three years is 9.11% compared to the category average of 13.19%. Over the past 5 years, the standard deviation of the fund is 8.41% compared to the category average of 13.67%. This makes the fund less volatile than its peers over the past half-decade.
CAYAX carries a beta of 0.91, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.21, 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, CAYAX has 22.8% in high quality bonds rated at least 'AA' or higher, while 22.95% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.
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
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, CAYAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.90%. Looking at the fund from a cost perspective, CAYAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $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.
Your research on the Muni - 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is CAYAX a Strong Bond Fund Right Now?
If investors are looking at the Muni - Bonds fund category, American Century CA High Yield Municipals A (CAYAX - Free Report) could be a potential option. CAYAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
CAYAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
CAYAX finds itself in the American Century family, based out of Kansas City, MO. American Century CA High Yield Municipals A made its debut in January of 2003, and since then, CAYAX has accumulated about $48.13 million in assets, per the most up-to-date date available. 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 carries a 5-year annualized total return of 0.81%, and it sits in the middle 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 -0.9%, 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. The standard deviation of CAYAX over the past three years is 9.11% compared to the category average of 13.19%. Over the past 5 years, the standard deviation of the fund is 8.41% compared to the category average of 13.67%. This makes the fund less volatile than its peers over the past half-decade.
CAYAX carries a beta of 0.91, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.21, 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, CAYAX has 22.8% in high quality bonds rated at least 'AA' or higher, while 22.95% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of BBB, and focuses on medium quality securities.
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
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, CAYAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 0.90%. Looking at the fund from a cost perspective, CAYAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $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.
Your research on the Muni - 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.