Is PCRAX a Strong Bond Fund Right Now?
Mutual Fund Bond fund seekers should not consider taking a look at PIMCO Commodity Real Retail Strategy A (PCRAX) at this time. PCRAX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PIMCO Funds is responsible for PCRAX, and the company is based out of Newport Beach, CA. Since PIMCO Commodity Real Retail Strategy A made its debut in June of 2002, PCRAX has garnered more than $256.67 million in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 8.58%, 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 10.18%, 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, PCRAX's standard deviation comes in at 18.09%, compared to the category average of 14.6%. The standard deviation of the fund over the past 5 years is 18.87% compared to the category average of 15.68%. This makes the fund more volatile than its peers over the past half-decade.
With a beta of -1.21, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PCRAX has a positive alpha of 8.67, 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, PCRAX has 87.55% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AAA, 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, PCRAX is a load fund. It has an expense ratio of 1.19% compared to the category average of 0.97%. Looking at the fund from a cost perspective, PCRAX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, PIMCO Commodity Real Retail Strategy A ( PCRAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, PIMCO Commodity Real Retail Strategy A ( PCRAX ) looks like a poor potential choice for investors right now.
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