If you've been stuck searching for Diversified Bonds funds, consider BlackRock Floating Rate Income A (BFRAX Quick QuoteBFRAX - Free Report) as a possibility. BFRAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

BFRAX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.

History of Fund/Manager

BlackRock is responsible for BFRAX, and the company is based out of New York, NY. BlackRock Floating Rate Income A made its debut in July of 2010, and since then, BFRAX has accumulated about $320.71 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. BFRAX has a 5-year annualized total return of 6.46% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.96%, 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. BFRAX's standard deviation over the past three years is 3.54% compared to the category average of 11.31%. Over the past 5 years, the standard deviation of the fund is 3.32% compared to the category average of 11.04%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of -0.14, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, BFRAX has a positive alpha of 4.43, 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, BFRAX is a load fund. It has an expense ratio of 0.90% compared to the category average of 0.97%. Looking at the fund from a cost perspective, BFRAX is actually cheaper than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to 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, BlackRock Floating Rate Income A ( BFRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.