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There are plenty of choices in the Government Mortgage - Short category, but where should you start your research? Well, one fund that might be worth investigating is PIMCO Low Duration Income Ins (PFIIX - Free Report) . PFIIX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PFIIX is classified in the Government Mortgage - Short segment by Zacks, which is full of possibilities. Government Mortgage - Short funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Focusing on securities that have less than three years until maturity, this category gives funds a lower yield but lower interest rate sensitivity.
History of Fund/Manager
PIMCO Funds is based in Newport Beach, CA, and is the manager of PFIIX. PIMCO Low Duration Income Ins made its debut in July of 2004, and since then, PFIIX has accumulated about $4.48 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 4.64%, and is in the top 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 6.02%, 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. Over the past three years, PFIIX's standard deviation comes in at 4.19%, compared to the category average of 11.93%. The standard deviation of the fund over the past 5 years is 3.75% compared to the category average of 11.64%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. PFIIX has a modified duration of 2.56, which suggests that the fund will decline 2.56% for every hundred-basis-point increase in interest rates.
With a beta of 0.22, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PFIIX has a positive alpha of 3.58, 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, PFIIX has 72.6% 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, PFIIX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.89%. From a cost perspective, PFIIX is actually cheaper than its peers.
While the minimum initial investment for the product is $1 million, 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, PIMCO Low Duration Income Ins ( PFIIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Government Mortgage - Short segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is PFIIX a Strong Bond Fund Right Now?
There are plenty of choices in the Government Mortgage - Short category, but where should you start your research? Well, one fund that might be worth investigating is PIMCO Low Duration Income Ins (PFIIX - Free Report) . PFIIX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PFIIX is classified in the Government Mortgage - Short segment by Zacks, which is full of possibilities. Government Mortgage - Short funds focus on the mortgage-backed securities (MBS) market, which packages mortgages together and then sells off the pooled securities as a MBS. Focusing on securities that have less than three years until maturity, this category gives funds a lower yield but lower interest rate sensitivity.
History of Fund/Manager
PIMCO Funds is based in Newport Beach, CA, and is the manager of PFIIX. PIMCO Low Duration Income Ins made its debut in July of 2004, and since then, PFIIX has accumulated about $4.48 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 4.64%, and is in the top 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 6.02%, 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. Over the past three years, PFIIX's standard deviation comes in at 4.19%, compared to the category average of 11.93%. The standard deviation of the fund over the past 5 years is 3.75% compared to the category average of 11.64%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. PFIIX has a modified duration of 2.56, which suggests that the fund will decline 2.56% for every hundred-basis-point increase in interest rates.
With a beta of 0.22, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PFIIX has a positive alpha of 3.58, 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, PFIIX has 72.6% 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, PFIIX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.89%. From a cost perspective, PFIIX is actually cheaper than its peers.
While the minimum initial investment for the product is $1 million, 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, PIMCO Low Duration Income Ins ( PFIIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Government Mortgage - Short segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.