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If you have been looking for High Yield - Bonds funds, it would not be wise to start your search with Ivy High Income A (WHIAX - Free Report) . WHIAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
WHIAX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
WHIAX finds itself in the Ivy Funds family, based out of Boca Raton, FL. The Ivy High Income A made its debut in September of 2003 and WHIAX has managed to accumulate roughly $2.11 billion in assets, as of the most recently available information. The fund's current manager, Chad A. Gunther, has been in charge of the fund since July of 2014.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.52%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.23%, 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. WHIAX's standard deviation over the past three years is 4.53% compared to the category average of 8.28%. The standard deviation of the fund over the past 5 years is 5.78% compared to the category average of 8.68%. 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 those that believe interest rates will rise, this is an important factor to consider. WHIAX has a modified duration of 3.3, which suggests that the fund will decline 3.3% for every hundred-basis-point increase in interest rates.
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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.58% means that a $10,000 investment should result in a yearly payout of $758.
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.
Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks. WHIAX carries a beta of 0.07, 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 2.79, which measures performance on a risk-adjusted basis.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, WHIAX is a load fund. It has an expense ratio of 0.95% compared to the category average of 1.02%. So, WHIAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $750; each subsequent investment has no minimum amount.
Bottom Line
Overall, Ivy High Income A ( WHIAX ) has a low Zacks Mutual Fund rank, weak performance, average downside risk, and lower fees compared to its peers.
For additional information on the High Yield - Bonds 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 WHIAX 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.
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Is WHIAX a Strong Bond Fund Right Now?
If you have been looking for High Yield - Bonds funds, it would not be wise to start your search with Ivy High Income A (WHIAX - Free Report) . WHIAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
WHIAX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
WHIAX finds itself in the Ivy Funds family, based out of Boca Raton, FL. The Ivy High Income A made its debut in September of 2003 and WHIAX has managed to accumulate roughly $2.11 billion in assets, as of the most recently available information. The fund's current manager, Chad A. Gunther, has been in charge of the fund since July of 2014.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.52%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.23%, 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. WHIAX's standard deviation over the past three years is 4.53% compared to the category average of 8.28%. The standard deviation of the fund over the past 5 years is 5.78% compared to the category average of 8.68%. 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 those that believe interest rates will rise, this is an important factor to consider. WHIAX has a modified duration of 3.3, which suggests that the fund will decline 3.3% for every hundred-basis-point increase in interest rates.
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. Average coupon is a look at the average payout by the fund in a given year. For example, this fund's average coupon of 7.58% means that a $10,000 investment should result in a yearly payout of $758.
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.
Because income is only one part of the bond picture, investors should also consider risk relative to broad benchmarks. WHIAX carries a beta of 0.07, 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 2.79, which measures performance on a risk-adjusted basis.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, WHIAX is a load fund. It has an expense ratio of 0.95% compared to the category average of 1.02%. So, WHIAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $750; each subsequent investment has no minimum amount.
Bottom Line
Overall, Ivy High Income A ( WHIAX ) has a low Zacks Mutual Fund rank, weak performance, average downside risk, and lower fees compared to its peers.
For additional information on the High Yield - Bonds 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 WHIAX 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.