Is PIMIX a Strong Bond Fund Right Now?
If you have been looking for Diversified Bonds funds, a place to start could be PIMCO Income Institutional PIMIX. PIMIX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PIMIX 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
PIMIX finds itself in the PIMCO Funds family, based out of Newport Beach, CA. PIMCO Income Institutional made its debut in April of 2007, and since then, PIMIX has accumulated about $51.88 billion in assets, per the most up-to-date date available. Daniel J. Ivascyn is the fund's current manager and has held that role since April of 2007.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 5.32%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.52%, which places it in the top 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. The standard deviation of PIMIX over the past three years is 2.25% compared to the category average of 7.83%. The fund's standard deviation over the past 5 years is 3.19% compared to the category average of 7.78%. This makes the fund less volatile than its peers over the past half-decade.
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, PIMIX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.92%. So, PIMIX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1 million, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, PIMCO Income Institutional 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 this product, or to compare it to other mutual funds in the Diversified Bonds, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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