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Investment Grade Bond - Intermediate fund seekers may want to consider taking a look at Principal Spectrum Preferred and Capital Securities Income A (PPSAX - Free Report) . PPSAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
PPSAX is one of many Investment Grade Bond - Intermediate funds to pick from. Investment Grade Bond - Intermediate funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. Fixed income instruments with this maturity level usually have medium duration risk, but they also compensate investors with a modest yield, at least when compared to their short maturity counterparts. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
PPSAX is a part of the Principal Financial Group family of funds, a company based out of Des Moines, IA. Principal Spectrum Preferred and Capital Securities Income A debuted in October of 2005. Since then, PPSAX has accumulated assets of about $680.94 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 has delivered a 5-year annualized total return of 2.54%, and it sits in the bottom 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 1.59%, 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 13.78%, the standard deviation of PPSAX over the past three years is 7.97%. The fund's standard deviation over the past 5 years is 9.25% compared to the category average of 14.89%. This makes the fund less volatile than its peers over the past half-decade.
PPSAX carries a beta of 0.13, 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 2.23, which measures performance on a risk-adjusted basis.
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, PPSAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.97%. From a cost perspective, PPSAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100
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 higher fees, Principal Spectrum Preferred and Capital Securities Income A ( PPSAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate 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 PPSAX too 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 PPSAX a Strong Bond Fund Right Now?
Investment Grade Bond - Intermediate fund seekers may want to consider taking a look at Principal Spectrum Preferred and Capital Securities Income A (PPSAX - Free Report) . PPSAX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
PPSAX is one of many Investment Grade Bond - Intermediate funds to pick from. Investment Grade Bond - Intermediate funds focus on the middle part of the curve, generally with bonds that usually mature in more than three years but less than 15 years. Fixed income instruments with this maturity level usually have medium duration risk, but they also compensate investors with a modest yield, at least when compared to their short maturity counterparts. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
PPSAX is a part of the Principal Financial Group family of funds, a company based out of Des Moines, IA. Principal Spectrum Preferred and Capital Securities Income A debuted in October of 2005. Since then, PPSAX has accumulated assets of about $680.94 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 has delivered a 5-year annualized total return of 2.54%, and it sits in the bottom 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 1.59%, 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 13.78%, the standard deviation of PPSAX over the past three years is 7.97%. The fund's standard deviation over the past 5 years is 9.25% compared to the category average of 14.89%. This makes the fund less volatile than its peers over the past half-decade.
PPSAX carries a beta of 0.13, 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 2.23, which measures performance on a risk-adjusted basis.
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, PPSAX is a load fund. It has an expense ratio of 1.04% compared to the category average of 0.97%. From a cost perspective, PPSAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100
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 higher fees, Principal Spectrum Preferred and Capital Securities Income A ( PPSAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Investment Grade Bond - Intermediate 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 PPSAX too 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.