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Looking for a Diversified Bonds fund? You may want to consider Putnam Diversified Income A (PDINX - Free Report) as a possible option. PDINX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify PDINX in the Diversified Bonds category, an area that is rife with potential choices.Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.
History of Fund/Manager
Putnam Funds is responsible for PDINX, and the company is based out of Canton, MA. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $492.55 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 2.7%, and it sits 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 7.06%, 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. Over the past three years, PDINX's standard deviation comes in at 4.67%, compared to the category average of 10.54%. The standard deviation of the fund over the past 5 years is 4.96% compared to the category average of 11.7%. 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.
For those that believe interest rates will rise, this is an important factor to consider. PDINX has a modified duration of 3.89, which suggests that the fund will decline 3.89% for every hundred-basis-point increase in interest rates.
With a beta of 0.55, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a positive alpha of 1.66 , 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, PDINX's junk bond component-bonds rated "BB" or below-is at 28.92%. This means that the fund has an average quality of BBB, and focuses on medium 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, PDINX is a load fund. It has an expense ratio of 0.50% compared to the category average of 1.00%. PDINX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $500 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Putnam Diversified Income A ( PDINX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund 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 Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is PDINX a Strong Bond Fund Right Now?
Looking for a Diversified Bonds fund? You may want to consider Putnam Diversified Income A (PDINX - Free Report) as a possible option. PDINX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify PDINX in the Diversified Bonds category, an area that is rife with potential choices.Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.
History of Fund/Manager
Putnam Funds is responsible for PDINX, and the company is based out of Canton, MA. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $492.55 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 2.7%, and it sits 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 7.06%, 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. Over the past three years, PDINX's standard deviation comes in at 4.67%, compared to the category average of 10.54%. The standard deviation of the fund over the past 5 years is 4.96% compared to the category average of 11.7%. 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.
For those that believe interest rates will rise, this is an important factor to consider. PDINX has a modified duration of 3.89, which suggests that the fund will decline 3.89% for every hundred-basis-point increase in interest rates.
With a beta of 0.55, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a positive alpha of 1.66 , 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, PDINX's junk bond component-bonds rated "BB" or below-is at 28.92%. This means that the fund has an average quality of BBB, and focuses on medium 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, PDINX is a load fund. It has an expense ratio of 0.50% compared to the category average of 1.00%. PDINX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $500 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Putnam Diversified Income A ( PDINX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund 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 Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.