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Is DLTNX a Strong Bond Fund Right Now?

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If you're looking for a Government Mortgage - Intermediate fund category, then a potential option is DoubleLine Total Return Bond N (DLTNX - Free Report) . DLTNX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

DLTNX is one of many Government Mortgage - Intermediate funds to choose from. Government Mortgage - Intermediate funds focus on the mortgage-backed securities (MBS) market. This market takes mortgages, packages them together, and sells off the pooled securities to investors. This particular category focuses on MBS that usually have at least three years to maturity, but less than 10, giving a medium risk and yield profile to funds here.

History of Fund/Manager

Double Line is based in Los Angeles, CA, and is the manager of DLTNX. The DoubleLine Total Return Bond N made its debut in April of 2010 and DLTNX has managed to accumulate roughly $3.90 billion in assets, as of the most recently available information. 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. DLTNX has a 5-year annualized total return of -0.47% 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 -0.28%, 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. DLTNX's standard deviation over the past three years is 7.22% compared to the category average of 11.93%. Over the past 5 years, the standard deviation of the fund is 6.03% compared to the category average of 12.5%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.01, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, DLTNX has a negative alpha of -0.26, 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, DLTNX has 70% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AA, and focuses on high 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, DLTNX is a no load fund. It has an expense ratio of 0.75% compared to the category average of 0.86%. DLTNX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,000; 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, DoubleLine Total Return Bond N ( DLTNX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, DoubleLine Total Return Bond N ( DLTNX ) looks like a somewhat average choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Government Mortgage - Intermediate, make sure to go to www.zacks.com/funds/mutual-funds 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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