High Yield - Bonds fund seekers should not consider taking a look at Eaton Vance Floating-Rate Advantage A (EAFAX) at this time. EAFAX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
EAFAX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
History of Fund/Manager
Eaton Vance is based in Boston, MA, and is the manager of EAFAX. Eaton Vance Floating-Rate Advantage A made its debut in April of 2008, and since then, EAFAX has accumulated about $1.43 billion in assets, per the most up-to-date date available. The fund is currently managed by Craig P. Russ who has been in charge of the fund since April of 2008.
Investors naturally seek funds with strong performance. EAFAX has a 5-year annualized total return of 1.3% 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 -0.48%, which places it in the middle 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. Over the past three years, EAFAX's standard deviation comes in at 9.78%, compared to the category average of 11.39%. The fund's standard deviation over the past 5 years is 8.02% compared to the category average of 10.28%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.33, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, EAFAX has a positive alpha of 0.02, which measures performance on a risk-adjusted basis.
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, EAFAX is a load fund. It has an expense ratio of 0.99% compared to the category average of 1.02%. EAFAX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment has no minimum amount.
Overall, Eaton Vance Floating-Rate Advantage A ( EAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Eaton Vance Floating-Rate Advantage A ( EAFAX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on High Yield - Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare EAFAX to its peers as well 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.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (EAFAX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research