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Is OSTIX a Strong Bond Fund Right Now?

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If you've been stuck searching for Diversified Bonds funds, consider The Osterweis Strategic Income Fund (OSTIX - Free Report) as a possibility. OSTIX bears 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 OSTIX. 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

Osterweis is based in San Francisco, CA, and is the manager of OSTIX. The Osterweis Strategic Income Fund debuted in August of 2002. Since then, OSTIX has accumulated assets of about $5.92 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. OSTIX has a 5-year annualized total return of 5.58% and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.5%, 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 OSTIX over the past three years is 5.42% compared to the category average of 7.44%. Looking at the past 5 years, the fund's standard deviation is 5.92% compared to the category average of 8.9%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.01, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, OSTIX has a positive alpha of 4.6, which measures performance on a risk-adjusted basis.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, OSTIX is a no load fund. It has an expense ratio of 0.81% compared to the category average of 0.91%. So, OSTIX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $5,000, investors should also note that each subsequent investment needs to be at least $100.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, The Osterweis Strategic Income Fund ( OSTIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, The Osterweis Strategic Income Fund ( OSTIX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Diversified Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare OSTIX to its peers as well 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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