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On the lookout for a High Yield - Bonds fund? Starting with Ivy High Income N (IHIFX - Free Report) should not be a possibility at this time. IHIFX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
IHIFX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
IHIFX is a part of the Ivy Funds family of funds, a company based out of Boca Raton, FL. Ivy High Income N debuted in July of 2014. Since then, IHIFX has accumulated assets of about $71 million, according to the most recently available information. Chad A. Gunther is the fund's current manager and has held that role since July of 2014.
Performance
Investors naturally seek funds with strong performance. IHIFX has a 5-year annualized total return of 4.31% and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.15%, 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. Compared to the category average of 8.6%, the standard deviation of IHIFX over the past three years is 4.38%. The standard deviation of the fund over the past 5 years is 5.75% compared to the category average of 8.86%. 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 those that believe interest rates will rise, this is an important factor to consider. IHIFX 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. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 7.57% means that a $10,000 investment should result in a yearly payout of $757.
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. IHIFX carries a beta of -0.06, 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 3.48, 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, IHIFX is a no load fund. It has an expense ratio of 0.56% compared to the category average of 1.02%. From a cost perspective, IHIFX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy High Income N ( IHIFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Ivy High Income N ( IHIFX ) looks like a somewhat weak choice for investors right now.
Your research on the High Yield - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is IHIFX a Strong Bond Fund Right Now?
On the lookout for a High Yield - Bonds fund? Starting with Ivy High Income N (IHIFX - Free Report) should not be a possibility at this time. IHIFX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
IHIFX is classified in the High Yield - Bonds segment by Zacks, an area full of investment possibilities. High Yield - Bonds funds come in below investment grade, and are referred to as " junk " bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
History of Fund/Manager
IHIFX is a part of the Ivy Funds family of funds, a company based out of Boca Raton, FL. Ivy High Income N debuted in July of 2014. Since then, IHIFX has accumulated assets of about $71 million, according to the most recently available information. Chad A. Gunther is the fund's current manager and has held that role since July of 2014.
Performance
Investors naturally seek funds with strong performance. IHIFX has a 5-year annualized total return of 4.31% and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 7.15%, 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. Compared to the category average of 8.6%, the standard deviation of IHIFX over the past three years is 4.38%. The standard deviation of the fund over the past 5 years is 5.75% compared to the category average of 8.86%. 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 those that believe interest rates will rise, this is an important factor to consider. IHIFX 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. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 7.57% means that a $10,000 investment should result in a yearly payout of $757.
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. IHIFX carries a beta of -0.06, 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 3.48, 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, IHIFX is a no load fund. It has an expense ratio of 0.56% compared to the category average of 1.02%. From a cost perspective, IHIFX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy High Income N ( IHIFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, Ivy High Income N ( IHIFX ) looks like a somewhat weak choice for investors right now.
Your research on the High Yield - Bonds segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.