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If you've been stuck searching for Investment Grade Bond - Intermediate funds, you might want to consider passing on by PIMCO Total Return Institutional (PTTRX - Free Report) as a possibility. PTTRX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that PTTRX 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
PTTRX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. PIMCO Total Return Institutional made its debut in May of 1987, and since then, PTTRX has accumulated about $33.94 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. PTTRX has a 5-year annualized total return of 0.11% and is in the middle 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 2.54%, 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. PTTRX's standard deviation over the past three years is 7.5% compared to the category average of 13.2%. The fund's standard deviation over the past 5 years is 6.5% compared to the category average of 13.93%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1, meaning that it is volatile than a broad market index of fixed income securities. Taking this into account, PTTRX has a positive alpha of 0.9, 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, PTTRX has 72.1% in high quality bonds rated at least 'AA' or higher, while 21.5% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
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, PTTRX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 0.91%. Looking at the fund from a cost perspective, PTTRX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.
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 similar performance, better downside risk, and lower fees, PIMCO Total Return Institutional ( PTTRX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Don't stop here for your research on Investment Grade Bond - Intermediate 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 PTTRX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is PTTRX a Strong Bond Fund Right Now?
If you've been stuck searching for Investment Grade Bond - Intermediate funds, you might want to consider passing on by PIMCO Total Return Institutional (PTTRX - Free Report) as a possibility. PTTRX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that PTTRX 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
PTTRX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. PIMCO Total Return Institutional made its debut in May of 1987, and since then, PTTRX has accumulated about $33.94 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. PTTRX has a 5-year annualized total return of 0.11% and is in the middle 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 2.54%, 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. PTTRX's standard deviation over the past three years is 7.5% compared to the category average of 13.2%. The fund's standard deviation over the past 5 years is 6.5% compared to the category average of 13.93%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1, meaning that it is volatile than a broad market index of fixed income securities. Taking this into account, PTTRX has a positive alpha of 0.9, 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, PTTRX has 72.1% in high quality bonds rated at least 'AA' or higher, while 21.5% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
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, PTTRX is a no load fund. It has an expense ratio of 0.46% compared to the category average of 0.91%. Looking at the fund from a cost perspective, PTTRX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.
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 similar performance, better downside risk, and lower fees, PIMCO Total Return Institutional ( PTTRX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Don't stop here for your research on Investment Grade Bond - Intermediate 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 PTTRX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.