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Any investors hoping to find a Government - Bonds: Misc fund could think about starting with Lord Abbett Floating Rate A (LFRAX - Free Report) . LFRAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
LFRAX 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
LFRAX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Lord Abbett Floating Rate A made its debut in December of 2007, and since then, LFRAX has accumulated about $1.33 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. LFRAX has a 5-year annualized total return of 5.56%, and is 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 7.98%, 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. LFRAX's standard deviation over the past three years is 2.11% compared to the category average of 9.62%. The fund's standard deviation over the past 5 years is 3.08% compared to the category average of 11.59%. 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.
For those that believe interest rates will rise, this is an important factor to consider. LFRAX has a modified duration of -.01, which suggests that the fund will decline -0.01% 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 1.04% means that a $10,000 investment should result in a yearly payout of $104.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
With a beta of -0.09, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LFRAX has a positive alpha of 2.54 , which measures performance on a risk-adjusted basis.
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, LFRAX is a load fund. It has an expense ratio of 0.81% compared to the category average of 0.94%. Looking at the fund from a cost perspective, LFRAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,500 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, Lord Abbett Floating Rate A ( LFRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Lord Abbett Floating Rate A ( LFRAX ) looks like a good potential choice for investors right now.
This could just be the start of your research on LFRAX in the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.
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Is LFRAX a Strong Bond Fund Right Now?
Any investors hoping to find a Government - Bonds: Misc fund could think about starting with Lord Abbett Floating Rate A (LFRAX - Free Report) . LFRAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
LFRAX 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
LFRAX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Lord Abbett Floating Rate A made its debut in December of 2007, and since then, LFRAX has accumulated about $1.33 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. LFRAX has a 5-year annualized total return of 5.56%, and is 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 7.98%, 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. LFRAX's standard deviation over the past three years is 2.11% compared to the category average of 9.62%. The fund's standard deviation over the past 5 years is 3.08% compared to the category average of 11.59%. 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.
For those that believe interest rates will rise, this is an important factor to consider. LFRAX has a modified duration of -.01, which suggests that the fund will decline -0.01% 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 1.04% means that a $10,000 investment should result in a yearly payout of $104.
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. Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks.
With a beta of -0.09, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, LFRAX has a positive alpha of 2.54 , which measures performance on a risk-adjusted basis.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, LFRAX is a load fund. It has an expense ratio of 0.81% compared to the category average of 0.94%. Looking at the fund from a cost perspective, LFRAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,500 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, Lord Abbett Floating Rate A ( LFRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, Lord Abbett Floating Rate A ( LFRAX ) looks like a good potential choice for investors right now.
This could just be the start of your research on LFRAX in the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.