Is MEMTX a Strong Bond Fund Right Now?
Any investors hoping to find a Muni - Bonds fund could think about starting with BlackRock Strategic Municipals Opportunities A (MEMTX). MEMTX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes MEMTX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.
History of Fund/Manager
BlackRock is based in New York, NY, and is the manager of MEMTX. The BlackRock Strategic Municipals Opportunities A made its debut in October of 2006 and MEMTX has managed to accumulate roughly $1.72 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. MEMTX has a 5-year annualized total return of 3.26% 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 3.67%, which places it in the bottom 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. Compared to the category average of 12.76%, the standard deviation of MEMTX over the past three years is 6.86%. Looking at the past 5 years, the fund's standard deviation is 5.84% compared to the category average of 10.7%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.32, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, MEMTX has a negative alpha of -0.78, which measures performance on a risk-adjusted basis.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, MEMTX is a load fund. It has an expense ratio of 0.77% compared to the category average of 0.80%. So, MEMTX is actually cheaper than its peers from a cost perspective.
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.
Bottom Line
Overall, BlackRock Strategic Municipals Opportunities A ( MEMTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on the Muni - Bonds area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into MEMTX too 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.
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 (MEMTX): Fund Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
