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Is HSNAX a Strong Bond Fund Right Now?

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If you've been stuck searching for Diversified Bonds funds, consider Hartford Strategic Income A (HSNAX - Free Report) as a possibility. HSNAX has a Zacks Mutual Fund Rank of 1 (Strong Buy), 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 HSNAX. 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

Hartford is based in Woodbury, MN, and is the manager of HSNAX. Hartford Strategic Income A made its debut in May of 2007, and since then, HSNAX has accumulated about $303.80 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. HSNAX has a 5-year annualized total return of 3.24% and is in the top 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 1.33%, 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. Over the past three years, HSNAX's standard deviation comes in at 7.66%, compared to the category average of 13.32%. The fund's standard deviation over the past 5 years is 8.35% compared to the category average of 14.37%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.49, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, HSNAX has a positive alpha of 3.22, 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, HSNAX has 40.01% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 39.78%. This means that the fund has an average quality of A, and focuses on high quality securities.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, HSNAX is a load fund. It has an expense ratio of 0.91% compared to the category average of 0.95%. Looking at the fund from a cost perspective, HSNAX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,000, and each subsequent investment should 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, Hartford Strategic Income A ( HSNAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on the Diversified Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into HSNAX too 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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