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If investors are looking at the Investment Grade Bond - Short fund category, FPA New Income Fund (FPNIX - Free Report) could be a potential option. FPNIX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
FPNIX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. 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
FPA is based in Los Angeles, CA, and is the manager of FPNIX. FPA New Income Fund made its debut in March of 1969, and since then, FPNIX has accumulated about $10.72 billion in assets, per the most up-to-date date available. The fund's current manager, Abhijeet Patwardhan, has been in charge of the fund since November of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FPNIX has a 5-year annualized total return of 3.35%, 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 6.48%, 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. Compared to the category average of 2.19%, the standard deviation of FPNIX over the past three years is 2.69%. The fund's standard deviation over the past 5 years is 2.38% compared to the category average of 2.39%. 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 investors who think interest rates will rise, this is an important factor to consider. FPNIX has a modified duration of 3.34, which suggests that the fund will decline 3.34% for every hundred-basis-point increase in interest rates.
This fund has a beta of 0.44, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FPNIX has a positive alpha of 1.27, which measures performance on a risk-adjusted basis.
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, FPNIX is a no load fund and it has an expense ratio of 0.45%.
Investors should also note that the minimum initial investment for the product is $1,500 and that each subsequent investment needs to be at $100.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
This puts this fund from FPA in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Investment Grade Bond - Short category.
Your research on the Investment Grade Bond - 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. 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 FPNIX a Strong Bond Fund Right Now?
If investors are looking at the Investment Grade Bond - Short fund category, FPA New Income Fund (FPNIX - Free Report) could be a potential option. FPNIX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
FPNIX is part of the Investment Grade Bond - Short category, a segment that boasts an array of other possible selections. Investment Grade Bond - Short funds target the short end of the curve by focusing on bonds that mature in less than two years. Fixed income instruments with this maturity level typically have low duration risk and pay out small yields, at least in comparison to their longer-dated peers. 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
FPA is based in Los Angeles, CA, and is the manager of FPNIX. FPA New Income Fund made its debut in March of 1969, and since then, FPNIX has accumulated about $10.72 billion in assets, per the most up-to-date date available. The fund's current manager, Abhijeet Patwardhan, has been in charge of the fund since November of 2015.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. FPNIX has a 5-year annualized total return of 3.35%, 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 6.48%, 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. Compared to the category average of 2.19%, the standard deviation of FPNIX over the past three years is 2.69%. The fund's standard deviation over the past 5 years is 2.38% compared to the category average of 2.39%. 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 investors who think interest rates will rise, this is an important factor to consider. FPNIX has a modified duration of 3.34, which suggests that the fund will decline 3.34% for every hundred-basis-point increase in interest rates.
This fund has a beta of 0.44, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FPNIX has a positive alpha of 1.27, which measures performance on a risk-adjusted basis.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, FPNIX is a no load fund and it has an expense ratio of 0.45%.
Investors should also note that the minimum initial investment for the product is $1,500 and that each subsequent investment needs to be at $100.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
This puts this fund from FPA in the top 20% of all mutual funds we have a rank on right now. As a result, this is likely an excellent choice for investors seeking an option in the Investment Grade Bond - Short category.
Your research on the Investment Grade Bond - 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. 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.