High Yield - Bonds fund seekers may want to consider taking a look at Federated Institutional High Yield Bond (FIHBX Quick QuoteFIHBX - Free Report) . FIHBX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FIHBX is part of the High Yield - Bonds section, which is a segment that boasts many possible options. Often referred to as " junk " bonds, High Yield - Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.

History of Fund/Manager

Federated is responsible for FIHBX, and the company is based out of Pittsburgh, PA. The Federated Institutional High Yield Bond made its debut in November of 2002 and FIHBX has managed to accumulate roughly $7.34 billion in assets, as of the most recently available information. The fund's current manager, Mark E. Durbiano, has been in charge of the fund since November of 2002.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.79%, and is in the middle 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 6.97%, 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. Over the past three years, FIHBX's standard deviation comes in at 8.92%, compared to the category average of 12.14%. Over the past 5 years, the standard deviation of the fund is 7.14% compared to the category average of 9.96%. This makes the fund less volatile than its peers over the past half-decade.

FIHBX carries a beta of 0.43, 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 4.96, 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, FIHBX is a no load fund. It has an expense ratio of 0.49% compared to the category average of 1%. Looking at the fund from a cost perspective, FIHBX is actually cheaper than its peers.

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, Federated Institutional High Yield Bond ( FIHBX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Federated Institutional High Yield Bond ( FIHBX ) looks like a somewhat average choice for investors right now.

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