On the lookout for a Investment Grade - Bonds: Misc fund? Starting with Frost Total Return Bond Investor (FATRX Quick QuoteFATRX - Free Report) is one possibility. FATRX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify FATRX in the Investment Grade - Bonds: Misc, as area rife with many potential choices. Investment Grade - Bonds: Misc funds are not focused on one part of the curve and often hold a variety of investment grade credit levels. However, this means that funds in this category may not be directly comparable, and duration risk will depend on a given fund's profile. Also, these funds tend to be safer because of their focus on investment grade, but yields will be lower than could be found in the junk bond category.

History of Fund/Manager

FATRX is a part of the Frost Funds family of funds, a company based out of San Antonio, Tx. Frost Total Return Bond Investor debuted in July of 2008. Since then, FATRX has accumulated assets of about $220.30 million, according to the most recently available information. The fund is currently managed by Jeffery Elswick who has been in charge of the fund since July of 2008.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 3.75%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.76%, 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. FATRX's standard deviation over the past three years is 4.24% compared to the category average of 9.81%. The fund's standard deviation over the past 5 years is 3.99% compared to the category average of 10.89%. 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. FATRX has a modified duration of 5.38, which suggests that the fund will decline 5.38% 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 5.46% means that a $10,000 investment should result in a yearly payout of $546.

For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose 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.

With a beta of 0.64, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FATRX has a positive alpha of 2.57 , 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, FATRX has 74.86% 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

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FATRX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.86%. From a cost perspective, FATRX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $500.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Frost Total Return Bond Investor ( FATRX ) 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.

Want even more information about FATRX? 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.