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Investors in search of a Government - Bonds: Misc fund might want to consider looking at Medalist MBS Total Return Investor (SEMPX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
SEMPX is one of many Government - Bonds: Misc funds to choose from. In their portfolios,Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.
History of Fund/Manager
Semper is based in New York, NY, and is the manager of SEMPX. Medalist MBS Total Return Investor debuted in July of 2013. Since then, SEMPX has accumulated assets of about $21.38 million, according to 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 carries a 5-year annualized total return of 4.7%, and it sits 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 10.69%, 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 9.57%, the standard deviation of SEMPX over the past three years is 2.8%. The standard deviation of the fund over the past 5 years is 4.41% compared to the category average of 11.03%. 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. SEMPX has a modified duration of 4.04, which suggests that the fund will decline 4.04% 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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 6.11% means that a $10,000 investment should result in a yearly payout of $611.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur 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 0.23, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, SEMPX has a positive alpha of 2.28 , 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, SEMPX has 43.4% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 20.1%, giving SEMPX 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, SEMPX is a no load fund. It has an expense ratio of 1.13% compared to the category average of 0.87%. From a cost perspective, SEMPX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $1,000.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Government - Bonds: Misc, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is SEMPX a Strong Bond Fund Right Now?
Investors in search of a Government - Bonds: Misc fund might want to consider looking at Medalist MBS Total Return Investor (SEMPX - Free Report) . While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.
Objective
SEMPX is one of many Government - Bonds: Misc funds to choose from. In their portfolios,Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.
History of Fund/Manager
Semper is based in New York, NY, and is the manager of SEMPX. Medalist MBS Total Return Investor debuted in July of 2013. Since then, SEMPX has accumulated assets of about $21.38 million, according to 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 carries a 5-year annualized total return of 4.7%, and it sits 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 10.69%, 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 9.57%, the standard deviation of SEMPX over the past three years is 2.8%. The standard deviation of the fund over the past 5 years is 4.41% compared to the category average of 11.03%. 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. SEMPX has a modified duration of 4.04, which suggests that the fund will decline 4.04% 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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 6.11% means that a $10,000 investment should result in a yearly payout of $611.
If you are looking for a strong level of current income, a higher coupon is a good choice, though it could pose a reinvestment risk; these risks can occur 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 0.23, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, SEMPX has a positive alpha of 2.28 , 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, SEMPX has 43.4% in medium quality bonds, with ratings of "A" to "BBB". The fund's junk bond component-bonds rated "BB" or below-is at 20.1%, giving SEMPX 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, SEMPX is a no load fund. It has an expense ratio of 1.13% compared to the category average of 0.87%. From a cost perspective, SEMPX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $1,000.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
For additional information on this product, or to compare it to other mutual funds in the Government - Bonds: Misc, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.