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On the lookout for a Diversified Bonds fund? Starting with Metropolitan West Total Retail Bond M (MWTRX) should not be a possibility at this time. MWTRX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
MWTRX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.
History of Fund/Manager
MWTRX is a part of the Metropolitan family of funds, a company based out of Los Angeles, CA. Metropolitan West Total Retail Bond M debuted in April of 1997. Since then, MWTRX has accumulated assets of about $9.89 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Investors naturally seek funds with strong performance. MWTRX has a 5-year annualized total return of 3.52% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.71%, 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, MWTRX's standard deviation comes in at 3.57%, compared to the category average of 12.35%. The standard deviation of the fund over the past 5 years is 3.29% compared to the category average of 10.31%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 1.02, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, MWTRX has a positive alpha of 0.35, which measures performance on a risk-adjusted basis.
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, MWTRX has 70.24% in high quality bonds rated at least 'AA' or higher, while 23.39% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.
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, MWTRX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 0.85%. MWTRX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $5,000, while there is no minimum for each subsequent investment.
Overall, Metropolitan West Total Retail Bond M ( MWTRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
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