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On the lookout for a High Yield - Bonds fund? Starting with Lord Abbett High Yield A (LHYAX - Free Report) should not be a possibility at this time. LHYAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
LHYAX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Lord Abbett is based in Jersey City, NJ, and is the manager of LHYAX. Since Lord Abbett High Yield A made its debut in December of 1998, LHYAX has garnered more than $700.66 million in assets. 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 4.88%, and it sits in the middle 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 4.76%, 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 13.09%, the standard deviation of LHYAX over the past three years is 8.03%. The fund's standard deviation over the past 5 years is 7.49% compared to the category average of 12.78%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. LHYAX has a modified duration of 3.24, which suggests that the fund will decline 3.24% for every hundred-basis-point increase in interest rates.
LHYAX carries a beta of 0.18, 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 5.37, 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, LHYAX is a load fund. It has an expense ratio of 0.92% compared to the category average of 0.94%. Looking at the fund from a cost perspective, LHYAX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,500, investors should also note that there is no minimum for each subsequent investment.
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, Lord Abbett High Yield A ( LHYAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Want even more information about LHYAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 LHYAX a Strong Bond Fund Right Now?
On the lookout for a High Yield - Bonds fund? Starting with Lord Abbett High Yield A (LHYAX - Free Report) should not be a possibility at this time. LHYAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
LHYAX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
Lord Abbett is based in Jersey City, NJ, and is the manager of LHYAX. Since Lord Abbett High Yield A made its debut in December of 1998, LHYAX has garnered more than $700.66 million in assets. 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 4.88%, and it sits in the middle 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 4.76%, 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 13.09%, the standard deviation of LHYAX over the past three years is 8.03%. The fund's standard deviation over the past 5 years is 7.49% compared to the category average of 12.78%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. LHYAX has a modified duration of 3.24, which suggests that the fund will decline 3.24% for every hundred-basis-point increase in interest rates.
LHYAX carries a beta of 0.18, 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 5.37, 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, LHYAX is a load fund. It has an expense ratio of 0.92% compared to the category average of 0.94%. Looking at the fund from a cost perspective, LHYAX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,500, investors should also note that there is no minimum for each subsequent investment.
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, Lord Abbett High Yield A ( LHYAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.
Want even more information about LHYAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.