If you're looking for a Diversified Bonds fund category, then a potential option is Putnam Diversified Income Y (PDVYX). PDVYX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
The world of Diversified Bonds funds is an area filled with options, such as PDVYX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDVYX. The Putnam Diversified Income Y made its debut in October of 1998 and PDVYX has managed to accumulate roughly $1.83 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 1.85%, and it sits in the middle 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 1.35%, 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. Compared to the category average of 11.39%, the standard deviation of PDVYX over the past three years is 8.61%. The standard deviation of the fund over the past 5 years is 7.65% compared to the category average of 10.39%. This makes the fund less volatile than its peers over the past half-decade.
PDVYX carries a beta of 0.34, 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 1.25, 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, PDVYX has 52.22% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 30.14%. This means that the fund has an average quality of A, and focuses on high quality securities.
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, PDVYX is a no load fund. It has an expense ratio of 0.36% compared to the category average of 0.89%. Looking at the fund from a cost perspective, PDVYX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Overall, Putnam Diversified Income Y ( PDVYX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Don't stop here for your research on Diversified 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 PDVYX to its peers 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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