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Is SDSYX a Strong Bond Fund Right Now?

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If you have been looking for Investment Grade Bond - Intermediate fund category, a potential starting could be Western Asset Global Strategy Income I (SDSYX - Free Report) . SDSYX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that SDSYX is an Investment Grade Bond - Intermediate option, which is a segment loaded with many different investment options. By targeting bonds that mature in more than three years but less than 15 years, Investment Grade Bond - Intermediate funds are a middle of the curve option. Fixed income instruments at this maturity level usually have medium duration risk, but their yields are respectable, especially in comparison to their short-maturity counterparts. Additionally, a focus on investment grade makes these funds safer, but yields tend to be lower than in the junk bond category.

History of Fund/Manager

Franklin is based in San Mateo, CA, and is the manager of SDSYX. Western Asset Global Strategy Income I debuted in October of 1995. Since then, SDSYX has accumulated assets of about $540.81 million, according to the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 1.83%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.45%, which places it in the bottom 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 12.65%, the standard deviation of SDSYX over the past three years is 7.2%. The fund's standard deviation over the past 5 years is 8.98% compared to the category average of 13.65%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.51, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, SDSYX has a positive alpha of 2, 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, SDSYX has 20.85% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 63.82%, giving SDSYX an average quality of BBB. This means that it focuses on medium quality securities.

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, SDSYX is a no load fund. It has an expense ratio of 0.64% compared to the category average of 0.94%. So, SDSYX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1 million, investors should also note that 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, Western Asset Global Strategy Income I ( SDSYX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Western Asset Global Strategy Income I ( SDSYX ) looks like a somewhat average choice for investors right now.

This could just be the start of your research on SDSYXin the Investment Grade Bond - Intermediate 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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