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Is BCOSX a Strong Bond Fund Right Now?

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On the lookout for a Diversified Bonds fund? Starting with Baird Core Plus Bond Investor (BCOSX - Free Report) is one possibility. BCOSX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify BCOSX in the Diversified Bonds category, an area that is rife with potential choices. Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.

History of Fund/Manager

Baird is based in Milwaukee, WI, and is the manager of BCOSX. The Baird Core Plus Bond Investor made its debut in September of 2000 and BCOSX has managed to accumulate roughly $1.16 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 0.43%, 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 -1.63%, which places it in the middle third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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, BCOSX's standard deviation comes in at 7.55%, compared to the category average of 10.89%. Over the past 5 years, the standard deviation of the fund is 6.6% compared to the category average of 10.93%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.93, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, BCOSX has a positive alpha of 0.71, which measures performance on a risk-adjusted basis.

Ratings

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, BCOSX has 56.9% in high quality bonds rated at least 'AA' or higher, while 40.3% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.

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, BCOSX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 0.80%. BCOSX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Baird Core Plus Bond Investor ( BCOSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Baird Core Plus Bond Investor ( BCOSX ) looks like a good potential 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 BCOSX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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