Is FLARX a Strong Bond Fund Right Now?
If you've been stuck searching for Investment Grade Bond - Short funds, you might want to consider passing on by Pioneer Floating Rate A (FLARX) as a possibility. FLARX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that FLARX is an Investment Grade Bond - Short option, which is an area loaded with different options. Investment Grade Bond - Short funds focus on the short end of the curve, generally with bonds that mature in less than two years. Fixed income instruments with this maturity level usually have low duration risk, while they also pay out small yields, at least when compared to their longer-dated peers. Additionally, the focus on investment grade will make funds here safer, but yields will be lower than in the junk bond category.
History of Fund/Manager
FLARX is a part of the Amundi US family of funds, a company based out of Boston, MA. Pioneer Floating Rate A debuted in February of 2007. Since then, FLARX has accumulated assets of about $68.65 million, according to the most recently available information. Jonathan Sharkey is the fund's current manager and has held that role since February of 2007.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 3.28%, and it sits in the bottom 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 3.82%, 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. FLARX's standard deviation over the past three years is 3.95% compared to the category average of 10.79%. The standard deviation of the fund over the past 5 years is 6.63% compared to the category average of 12.48%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of -0.17, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, FLARX has a positive alpha of 1.86, 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, FLARX is a load fund. It has an expense ratio of 1.05% compared to the category average of 0.99%. From a cost perspective, FLARX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Pioneer Floating Rate A ( FLARX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, Pioneer Floating Rate A ( FLARX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Investment Grade Bond - Short, make sure to go to www.zacks.com/funds/mutual-funds 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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