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Any investors hoping to find a High Yield - Bonds fund could think about starting with Federated Institutional High Yield Bond (FIHBX - Free Report) . FIHBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FIHBX 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
Federated is responsible for FIHBX, and the company is based out of Pittsburgh, PA. Since Federated Institutional High Yield Bond made its debut in November of 2002, FIHBX has garnered more than $5.51 billion in assets. The fund is currently managed by Mark E. Durbiano who has been in charge of the fund since November of 2002.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.75%, 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 6.91%, 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. Over the past three years, FIHBX's standard deviation comes in at 4.67%, compared to the category average of 6.67%. The standard deviation of the fund over the past 5 years is 5.34% compared to the category average of 7.17%. 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, 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. FIHBX has a modified duration of 4.4, which suggests that the fund will decline 4.4% 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 6.29% means that a $10,000 investment should result in a yearly payout of $629.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 0.21, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FIHBX has a positive alpha of 3.26, 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, FIHBX is a no load fund. It has an expense ratio of 0.49% compared to the category average of 1.02%. So, FIHBX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1 million, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Federated Institutional High Yield Bond ( FIHBX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Want even more information about FIHBX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 FIHBX a Strong Bond Fund Right Now?
Any investors hoping to find a High Yield - Bonds fund could think about starting with Federated Institutional High Yield Bond (FIHBX - Free Report) . FIHBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
FIHBX 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
Federated is responsible for FIHBX, and the company is based out of Pittsburgh, PA. Since Federated Institutional High Yield Bond made its debut in November of 2002, FIHBX has garnered more than $5.51 billion in assets. The fund is currently managed by Mark E. Durbiano who has been in charge of the fund since November of 2002.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.75%, 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 6.91%, 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. Over the past three years, FIHBX's standard deviation comes in at 4.67%, compared to the category average of 6.67%. The standard deviation of the fund over the past 5 years is 5.34% compared to the category average of 7.17%. 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, 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. FIHBX has a modified duration of 4.4, which suggests that the fund will decline 4.4% 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 6.29% means that a $10,000 investment should result in a yearly payout of $629.
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.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. This fund has a beta of 0.21, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FIHBX has a positive alpha of 3.26, 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, FIHBX is a no load fund. It has an expense ratio of 0.49% compared to the category average of 1.02%. So, FIHBX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1 million, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Federated Institutional High Yield Bond ( FIHBX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
Want even more information about FIHBX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.