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Looking for a Muni - Bonds fund? You may want to consider American Century CA High Yield Municipals Investor (BCHYX - Free Report) as a possible option. BCHYX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify BCHYX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
American Century is responsible for BCHYX, and the company is based out of Kansas City, MO. The American Century CA High Yield Municipals Investor made its debut in December of 1986 and BCHYX has managed to accumulate roughly $866.61 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. BCHYX has a 5-year annualized total return of 5.34% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.98%, 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. The standard deviation of BCHYX over the past three years is 4.28% compared to the category average of -8.35%. Over the past 5 years, the standard deviation of the fund is 3.85% compared to the category average of -3.57%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. BCHYX has a modified duration of 7.67, which suggests that the fund will decline 7.67% 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 4.79% means that a $10,000 investment should result in a yearly payout of $479.
A higher coupon is good for those seeking a strong level of current income, but it could also 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 1.24, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, BCHYX has a positive alpha of 0.88, 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, BCHYX has 51.68% in high quality bonds rated at least 'AA' or higher, while 39.62% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high 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, BCHYX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 1.75%. So, BCHYX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $5,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Century CA High Yield Municipals Investor ( BCHYX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Don't stop here for your research on Muni - Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BCHYX to its peers 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 BCHYX a Strong Bond Fund Right Now?
Looking for a Muni - Bonds fund? You may want to consider American Century CA High Yield Municipals Investor (BCHYX - Free Report) as a possible option. BCHYX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify BCHYX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.
History of Fund/Manager
American Century is responsible for BCHYX, and the company is based out of Kansas City, MO. The American Century CA High Yield Municipals Investor made its debut in December of 1986 and BCHYX has managed to accumulate roughly $866.61 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. BCHYX has a 5-year annualized total return of 5.34% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 2.98%, 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. The standard deviation of BCHYX over the past three years is 4.28% compared to the category average of -8.35%. Over the past 5 years, the standard deviation of the fund is 3.85% compared to the category average of -3.57%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.
For investors who think interest rates will rise, this is an important factor to consider. BCHYX has a modified duration of 7.67, which suggests that the fund will decline 7.67% 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 4.79% means that a $10,000 investment should result in a yearly payout of $479.
A higher coupon is good for those seeking a strong level of current income, but it could also 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 1.24, this fund is more volatile than a broad market index of fixed income securities. Taking this into account, BCHYX has a positive alpha of 0.88, 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, BCHYX has 51.68% in high quality bonds rated at least 'AA' or higher, while 39.62% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high 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, BCHYX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 1.75%. So, BCHYX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $5,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Century CA High Yield Municipals Investor ( BCHYX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Don't stop here for your research on Muni - Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare BCHYX to its peers 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.