Having trouble finding a Mutual Fund Bond fund? Putnam Diversified Income Y (PDVYX) is a potential starting point. PDVYX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDVYX. Putnam Diversified Income Y made its debut in October of 1998, and since then, PDVYX has accumulated about $875.21 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 1.13%, 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 -0.9%, which places it in the bottom 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. Compared to the category average of 13.67%, the standard deviation of PDVYX over the past three years is 8.87%. The fund's standard deviation over the past 5 years is 7.23% compared to the category average of 12.17%. This makes the fund less volatile than its peers over the past half-decade.
PDVYX carries a beta of -0.06, 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 0.32, 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, PDVYX has 33.92% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 43.24%. This means that the fund has an average quality of BBB, and focuses on medium quality securities.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, PDVYX is a no load fund. It has an expense ratio of 0.76% compared to the category average of 0.83%. From a cost perspective, PDVYX is actually cheaper than its peers.