Back to top

Image: Bigstock

Is PDINX a Strong Bond Fund Right Now?

Read MoreHide Full Article

Diversified Bonds fund seekers may want to consider taking a look at Putnam Diversified Income A (PDINX - Free Report) . PDINX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Diversified Bonds funds is an area filled with options, such as PDINX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.

History of Fund/Manager

Putnam Funds is based in Canton, MA, and is the manager of PDINX. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $880.88 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 0.73%, and is in the middle 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 -0.28%, which places it in the middle 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 11.39%, the standard deviation of PDINX over the past three years is 8.47%. Over the past 5 years, the standard deviation of the fund is 7.56% compared to the category average of 10.39%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.37, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a positive alpha of 0.31, 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, PDINX has 52.22% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 30.14%. This means that 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, PDINX is a load fund. It has an expense ratio of 0.98% compared to the category average of 0.89%. PDINX is actually more expensive than its peers when you consider factors like cost.

While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Putnam Diversified Income A ( PDINX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a somewhat average choice for investors right now.

Want even more information about PDINX? 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. 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.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Putnam Diversified Income A (PDINX) - free report >>

Published in