There are plenty of choices in the Government - Bonds: Misc category, but where should you start your research? Well, one fund that might be worth investigating is Lord Abbett Floating Rate A (LFRAX Quick QuoteLFRAX - Free Report) . LFRAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We note that LFRAX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective,Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.

History of Fund/Manager

Lord Abbett is based in Jersey City, NJ, and is the manager of LFRAX. Since Lord Abbett Floating Rate A made its debut in December of 2007, LFRAX has garnered more than $1.34 billion in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. LFRAX has a 5-year annualized total return of 5.84%, 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 7.22%, 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. Over the past three years, LFRAX's standard deviation comes in at 2.31%, compared to the category average of 10.22%. Over the past 5 years, the standard deviation of the fund is 3.26% compared to the category average of 11.94%. 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 investors who think interest rates will rise, this is an important factor to consider. LFRAX has a modified duration of -.03, which suggests that the fund will decline -0.03% for every hundred-basis-point increase in interest rates.

Income

We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 1.32% means that a $10,000 investment should result in a yearly payout of $132.

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.

LFRAX carries a beta of 0.21, 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 2.22, 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, LFRAX is a load fund. It has an expense ratio of 0.81% compared to the category average of 0.94%. 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, this fund looks like a good potential choice for investors right now.

For additional information on the Government - Bonds: Misc area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into LFRAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.