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Is GAMDX a Strong Bond Fund Right Now?

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International Bond - Emerging fund seekers should consider taking a look at Goldman Sachs Local Emerging Markets Debt A (GAMDX - Free Report) . GAMDX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify GAMDX in the International Bond - Emerging category, an area rife with many investment choices. International Bond - Emerging funds focus on fixed income securities from emerging nations from around the globe. This usually results in exposure to economies like China, Brazil, India, South Africa, and Indonesia, just to name a few. Funds here offer geographic diversification, but they can also introduce currency risk into the picture as well.

History of Fund/Manager

Goldman Sachs is based in New York, NY, and is the manager of GAMDX. Goldman Sachs Local Emerging Markets Debt A debuted in February of 2008. Since then, GAMDX has accumulated assets of about $3.21 million, according to the most recently available information. The fund is currently managed by Nicholas Saunders who has been in charge of the fund since October of 2023.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 2.12%, 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 5.55%, 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. GAMDX's standard deviation over the past three years is 8.69% compared to the category average of 13.03%. The standard deviation of the fund over the past 5 years is 9.21% compared to the category average of 12.8%. This makes the fund less volatile than its peers over the past half-decade.

Bond Duration

Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.

If you believe interest rates will rise, this is an important factor to look at. GAMDX has a modified duration of 4.03, which suggests that the fund will decline 4.03% for every hundred-basis-point increase in interest rates.

GAMDX carries a beta of 0.37, 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 3.28, which measures performance on a risk-adjusted basis.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, GAMDX is a load fund. It has an expense ratio of 1.14% compared to the category average of 0.95%. GAMDX is actually more expensive than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50

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 higher fees, Goldman Sachs Local Emerging Markets Debt A ( GAMDX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

This could just be the start of your research on GAMDXin the International Bond - Emerging category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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