Is FTAZX a Strong Bond Fund Right Now?
Have you been searching for a Mutual Fund Bond fund? You might want to begin with Franklin Arizona Tax-Free Income A (FTAZX). FTAZX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
FTAZX finds itself in the Franklin family, based out of San Mateo, CA. Franklin Arizona Tax-Free Income A made its debut in September of 1987, and since then, FTAZX has accumulated about $350.08 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. FTAZX has a 5-year annualized total return of 0.07% 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 -3.3%, which places it in the middle 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 FTAZX over the past three years is 6.44% compared to the category average of 13.04%. Over the past 5 years, the standard deviation of the fund is 5.86% compared to the category average of 13.43%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.86, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, FTAZX has a negative alpha of -0.93, which measures performance on a risk-adjusted basis.
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, FTAZX is a load fund. It has an expense ratio of 0.68% compared to the category average of 0.92%. From a cost perspective, FTAZX is actually cheaper than its peers.
This fund requires a minimum initial investment of $1,000, while 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, Franklin Arizona Tax-Free Income A ( FTAZX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Bond, make sure to go to www.zacks.com/funds/mutual-funds 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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