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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 might be worth investigating is PIMCO CommoditiesPlus Strategy A (PCLAX). PCLAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
PCLAX 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
PIMCO Funds is based in Newport Beach, CA, and is the manager of PCLAX. PIMCO CommoditiesPlus Strategy A made its debut in June of 2010, and since then, PCLAX has accumulated about $102.97 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 11.13%, 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 9.37%, which places it in the top 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. The standard deviation of PCLAX over the past three years is 14.66% compared to the category average of 14.47%. Over the past 5 years, the standard deviation of the fund is 23.47% compared to the category average of 15.69%. This makes the fund more volatile than its peers over the past half-decade.
This fund has a beta of -1.46, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, PCLAX has a positive alpha of 11.25, 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, PCLAX has 91.66% in high quality bonds rated at least 'AA' or higher. The fund has an average quality of AAA, and focuses on high quality securities.