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There are plenty of choices in the International Bond - Emerging category, but where should you start your research? Well, one fund that might be worth investigating is Eaton Vance Emerging Markets Local Income A (EEIAX - Free Report) . EEIAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify EEIAX in the International Bond - Emerging category, an area rife with many investment choices. International Bond - Emerging funds focus on fixed income securities from emerging nations from around the globe. This usually results in exposure to economies like China, Brazil, India, South Africa, and Indonesia, just to name a few. Funds here offer geographic diversification, but they can also introduce currency risk into the picture as well.
History of Fund/Manager
EEIAX is a part of the Eaton Vance family of funds, a company based out of Boston, MA. Since Eaton Vance Emerging Markets Local Income A made its debut in August of 2007, EEIAX has garnered more than $87.39 million in assets. Michael A. Cirami is the fund's current manager and has held that role since January 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 -0.63%, 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 3.8%, which places it in the top third during this time-frame.
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. EEIAX's standard deviation over the past three years is 11.25% compared to the category average of 8.39%. The fund's standard deviation over the past 5 years is 11.05% compared to the category average of 8.31%. This makes the fund more volatile than its peers over the past half-decade.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always 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 8.83% means that a $10,000 investment should result in a yearly payout of $883.
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 1.38, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, EEIAX has a negative alpha of -2.61, 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, EEIAX has 42.88% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 50.1%, giving EEIAX 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, EEIAX is a load fund. It has an expense ratio of 1.26% compared to the category average of 1.18%. Looking at the fund from a cost perspective, EEIAX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Eaton Vance Emerging Markets Local Income A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
For additional information on the International Bond - Emerging 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 EEIAX too 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 EEIAX a Strong Bond Fund Right Now?
There are plenty of choices in the International Bond - Emerging category, but where should you start your research? Well, one fund that might be worth investigating is Eaton Vance Emerging Markets Local Income A (EEIAX - Free Report) . EEIAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify EEIAX in the International Bond - Emerging category, an area rife with many investment choices. International Bond - Emerging funds focus on fixed income securities from emerging nations from around the globe. This usually results in exposure to economies like China, Brazil, India, South Africa, and Indonesia, just to name a few. Funds here offer geographic diversification, but they can also introduce currency risk into the picture as well.
History of Fund/Manager
EEIAX is a part of the Eaton Vance family of funds, a company based out of Boston, MA. Since Eaton Vance Emerging Markets Local Income A made its debut in August of 2007, EEIAX has garnered more than $87.39 million in assets. Michael A. Cirami is the fund's current manager and has held that role since January 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 -0.63%, 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 3.8%, which places it in the top third during this time-frame.
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. EEIAX's standard deviation over the past three years is 11.25% compared to the category average of 8.39%. The fund's standard deviation over the past 5 years is 11.05% compared to the category average of 8.31%. This makes the fund more volatile than its peers over the past half-decade.
Income
Since income is, of course, a big reason for purchasing a fixed income security, it is always 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 8.83% means that a $10,000 investment should result in a yearly payout of $883.
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 1.38, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, EEIAX has a negative alpha of -2.61, 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, EEIAX has 42.88% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 50.1%, giving EEIAX 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, EEIAX is a load fund. It has an expense ratio of 1.26% compared to the category average of 1.18%. Looking at the fund from a cost perspective, EEIAX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Bottom Line
Overall, Eaton Vance Emerging Markets Local Income A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
For additional information on the International Bond - Emerging 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 EEIAX too 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.