Is DINAX a Strong Bond Fund Right Now?
If you have been looking for Diversified Bonds funds, a place to start could be Morgan Stanley Global Fixed Income Opportunity A (DINAX). DINAX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
DINAX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
DINAX finds itself in the MorgStanley family, based out of New York, NY. Since Morgan Stanley Global Fixed Income Opportunity A made its debut in August of 1997, DINAX has garnered more than $99.85 million in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. DINAX has a 5-year annualized total return of 5.29% and is 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 4.72%, 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 13.47%, the standard deviation of DINAX over the past three years is 6.26%. Over the past 5 years, the standard deviation of the fund is 5.09% compared to the category average of 11.37%. This makes the fund less volatile than its peers over the past half-decade.
DINAX carries a beta of 0.62, 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 2.46, 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, DINAX has 42.41% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 28.35%, giving DINAX an average quality of BBB. This means that it focuses on medium quality securities.
However, it is worth noting that 22 % of the bonds in this fund are not ranked, so take the average quality level with a bit of caution.
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, DINAX is a load fund. It has an expense ratio of 0.83% compared to the category average of 0.88%. So, DINAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Morgan Stanley Global Fixed Income Opportunity A ( DINAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, Morgan Stanley Global Fixed Income Opportunity A ( DINAX ) looks like a good potential choice for investors right now.
Want even more information about DINAX? 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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