Is PTSHX a Strong Bond Fund Right Now?
There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that might be worth investigating is PIMCO Short Term Institutional (PTSHX). PTSHX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PIMCO Funds is based in Newport Beach, CA, and is the manager of PTSHX. PIMCO Short Term Institutional made its debut in October of 1987, and since then, PTSHX has accumulated about $7.30 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 1.93%, 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 1.69%, 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 PTSHX over the past three years is 0.91% compared to the category average of 12.41%. Over the past 5 years, the standard deviation of the fund is 1.96% compared to the category average of 13.34%. This makes the fund less volatile than its peers over the past half-decade.
PTSHX carries a beta of -0.01, 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 0.2, 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, PTSHX has 59.4% in high quality bonds rated at least 'AA' or higher, while 40.1% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high 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, PTSHX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.66%. Looking at the fund from a cost perspective, PTSHX is actually cheaper than its peers.
While the minimum initial investment for the product is $1 million, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, PIMCO Short Term Institutional ( PTSHX ) 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.
Your research on the Mutual Fund Bond 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. 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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