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There are plenty of choices in the Diversified Bonds category, but where should you start your research? Well, one fund that may not be worth investigating is PGIM Global Total Return A (GTRAX - Free Report) . GTRAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
GTRAX 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
PGIM is based in Providence, RI, and is the manager of GTRAX. Since PGIM Global Total Return A made its debut in July of 1986, GTRAX has garnered more than $163.67 million in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -1.9%, 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 -4.24%, which places it in the bottom 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. Compared to the category average of 13.23%, the standard deviation of GTRAX over the past three years is 10.6%. The fund's standard deviation over the past 5 years is 10.18% compared to the category average of 14.02%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.85, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, GTRAX has a negative alpha of -0.78, 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, GTRAX has 31.65% in high quality bonds rated at least 'AA' or higher, while 50.11% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, 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, GTRAX is a load fund. It has an expense ratio of 0.88% compared to the category average of 0.93%. Looking at the fund from a cost perspective, GTRAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, PGIM Global Total Return A ( GTRAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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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Is GTRAX a Strong Bond Fund Right Now?
There are plenty of choices in the Diversified Bonds category, but where should you start your research? Well, one fund that may not be worth investigating is PGIM Global Total Return A (GTRAX - Free Report) . GTRAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
GTRAX 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
PGIM is based in Providence, RI, and is the manager of GTRAX. Since PGIM Global Total Return A made its debut in July of 1986, GTRAX has garnered more than $163.67 million in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -1.9%, 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 -4.24%, which places it in the bottom 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. Compared to the category average of 13.23%, the standard deviation of GTRAX over the past three years is 10.6%. The fund's standard deviation over the past 5 years is 10.18% compared to the category average of 14.02%. This makes the fund less volatile than its peers over the past half-decade.
This fund has a beta of 0.85, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, GTRAX has a negative alpha of -0.78, 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, GTRAX has 31.65% in high quality bonds rated at least 'AA' or higher, while 50.11% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, 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, GTRAX is a load fund. It has an expense ratio of 0.88% compared to the category average of 0.93%. Looking at the fund from a cost perspective, GTRAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, PGIM Global Total Return A ( GTRAX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak 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.