Have you been searching for a High Yield - Bonds fund? You might want to begin with Lord Abbett Bond Debenture A (LBNDX). LBNDX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
LBNDX 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
LBNDX finds itself in the Lord Abbett family, based out of Jersey City, NJ. Lord Abbett Bond Debenture A made its debut in April of 1971, and since then, LBNDX has accumulated about $4.75 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 2.48%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.22%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, LBNDX's standard deviation comes in at 7.01%, compared to the category average of 13.49%. The fund's standard deviation over the past 5 years is 8.75% compared to the category average of 14.52%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.32, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, LBNDX has a positive alpha of 2.32, 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, LBNDX has 32% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 47.4%, giving LBNDX an average quality of BBB. This means that it focuses on medium 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, LBNDX is a load fund. It has an expense ratio of 0.78% compared to the category average of 0.95%. LBNDX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Lord Abbett Bond Debenture A ( LBNDX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, Lord Abbett Bond Debenture A ( LBNDX ) looks like a somewhat average choice for investors right now.
Don't stop here for your research on High Yield - 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 LBNDX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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