Investment Grade - Bonds: Misc fund seekers should consider taking a look at Lord Abbett Income Fund A (LAGVX Quick QuoteLAGVX - Free Report) . LAGVX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

LAGVX is one of many Investment Grade - Bonds: Misc funds to pick from. Investment Grade - Bonds: Misc funds do not focus on one particular part of the curve and can also hold a wide range of investment grade credit levels. A fund's duration risk will depend on its individual investment profile, which means funds in this category are not always directly comparable. Of course, the focus on investment grade will make these funds safer, but yields will be lower than those in the junk bond category.

History of Fund/Manager

Lord Abbett is based in Jersey City, NJ, and is the manager of LAGVX. The Lord Abbett Income Fund A made its debut in January of 1982 and LAGVX has managed to accumulate roughly $1.39 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 1.6%, and it sits in the top 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 7.94%, 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. LAGVX's standard deviation over the past three years is 6.95% compared to the category average of 11.36%. The fund's standard deviation over the past 5 years is 7.25% compared to the category average of 12.59%. 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. LAGVX has a modified duration of 6.79, which suggests that the fund will decline 6.79% for every hundred-basis-point increase in interest rates.

Income

Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 5.25% means that a $10,000 investment should result in a yearly payout of $525.

While a higher coupon is good for when you want a strong level of current income, it could present a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond. Income is only one part of the bond picture, investors also need to consider risk relative to broad benchmarks.

LAGVX carries a beta of 0.92, 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 2.25, 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, LAGVX has 62.01% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 19.94%, giving LAGVX an average quality of BBB. This means that it 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, LAGVX is a load fund. It has an expense ratio of 0.70% compared to the category average of 0.91%. LAGVX is actually cheaper than its peers when you consider factors like cost.

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 consideration. Returns would be less if those were included.

Bottom Line

Overall, Lord Abbett Income Fund A ( LAGVX ) 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.

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