Is PTIAX a Strong Bond Fund Right Now?

Zacks Equity Research
·4-min read

If you have been looking for Government Bond - Intermediate funds, it would not be wise to start your search with Performance Trust Total Return Bond (PTIAX). PTIAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify PTIAX in the Government Bond - Intermediate category, an area rife with potential choices. Government Bond - Intermediate funds hold securities issued by the federal government of the United States, and are often seen as risk-free assets; they are also described as extremely low-risk from a default perspective. Best suited for investors looking to balance their existing core bond portfolio, these funds carry the risk and return potential that is between short and long government bonds.

History of Fund/Manager

Performance is based in New York, NY, and is the manager of PTIAX. Since Performance Trust Total Return Bond made its debut in August of 2010, PTIAX has garnered more than $4.87 billion in assets. The fund's current manager, G. Plaiss, has been in charge of the fund since December of 2013.

Performance

Of course, investors look for strong performance in funds. PTIAX has a 5-year annualized total return of 5.34% and is in the top 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 5.01%, 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. The standard deviation of PTIAX over the past three years is 4.69% compared to the category average of 7.68%. The fund's standard deviation over the past 5 years is 3.9% compared to the category average of 6.15%. This makes the fund less volatile than its peers over the past half-decade.

PTIAX carries a beta of 0.85, 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 1.51, 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, PTIAX has 23.48% in high quality bonds rated at least 'AA' or higher, while 31.78% are of medium quality, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 39.17%, giving PTIAX 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, PTIAX is a no load fund. It has an expense ratio of 0.78% compared to the category average of 0.78%. PTIAX is actually on par with its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $500.

Bottom Line

Overall, Performance Trust Total Return Bond ( PTIAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and on par fees, this fund looks like a somewhat weak choice for investors right now.

Your research on the Government Bond - Intermediate 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.


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