If investors are looking at the Mutual Fund Bond fund category, Frost Total Return Bond Investor (FATRX) could be a potential option. FATRX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Frost Funds is based in San Antonio, Tx, and is the manager of FATRX. Frost Total Return Bond Investor debuted in July of 2008. Since then, FATRX has accumulated assets of about $222.21 million, according to the most recently available information. The fund’s current manager, Jeffery Elswick, has been in charge of the fund since July of 2008.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 2.23%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.23%, which places it in the top 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. The standard deviation of FATRX over the past three years is 3.9% compared to the category average of 10.58%. Looking at the past 5 years, the fund’s standard deviation is 4.76% compared to the category average of 11.19%. This makes the fund less volatile than its peers over the past half-decade.
FATRX carries a beta of 0.43, 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 0.99, 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, FATRX has 70.66% in high quality bonds rated at least ‘AA’ or higher. The fund has an average quality of AA, and focuses on high quality securities.
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, FATRX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 0.84%. So, FATRX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $500.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Frost Total Return Bond Investor ( FATRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on FATRXin the Mutual Fund Bond category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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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