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There are plenty of choices in the Muni - Bonds 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 - Free Report) . ABHFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ABHFX 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
ABHFX finds itself in the American Funds family, based out of Los Angeles, CA. American Funds High Income Municipals Bond F made its debut in September of 1994, and since then, ABHFX has accumulated about $111 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 2.16%, and it sits in the top 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 0.58%, 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 ABHFX over the past three years is 8.68% compared to the category average of 13.2%. The fund's standard deviation over the past 5 years is 8.33% compared to the category average of 13.86%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.87, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, ABHFX has a positive alpha of 1.5, which measures performance on a risk-adjusted basis.
Ratings
However, it is worth noting that 36 % 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, ABHFX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.93%. So, ABHFX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $250 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 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.
This could just be the start of your research on ABHFXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is ABHFX a Strong Bond Fund Right Now?
There are plenty of choices in the Muni - Bonds 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 - Free Report) . ABHFX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ABHFX 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
ABHFX finds itself in the American Funds family, based out of Los Angeles, CA. American Funds High Income Municipals Bond F made its debut in September of 1994, and since then, ABHFX has accumulated about $111 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 2.16%, and it sits in the top 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 0.58%, 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 ABHFX over the past three years is 8.68% compared to the category average of 13.2%. The fund's standard deviation over the past 5 years is 8.33% compared to the category average of 13.86%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.87, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, ABHFX has a positive alpha of 1.5, which measures performance on a risk-adjusted basis.
Ratings
However, it is worth noting that 36 % 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, ABHFX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.93%. So, ABHFX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $250 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 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.
This could just be the start of your research on ABHFXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.