On the lookout for a High Yield – Bonds fund? Starting with Lord Abbett High Yield A (LHYAX) should not be a possibility at this time. LHYAX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
LHYAX is classified in the High Yield – Bonds segment by Zacks, an area full of investment possibilities. High Yield – Bonds funds come in below investment grade, and are referred to as ” junk ” bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
Lord Abbett is based in Jersey City, NJ, and is the manager of LHYAX. Since Lord Abbett High Yield A made its debut in December of 1998, LHYAX has garnered more than $700.66 million in assets. A team of investment professionals is the fund’s current manager.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.88%, and it sits in the middle 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 4.76%, which places it in the bottom third during this time-frame.
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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 13.09%, the standard deviation of LHYAX over the past three years is 8.03%. The fund’s standard deviation over the past 5 years is 7.49% compared to the category average of 12.78%. This makes the fund less volatile than its peers over the past half-decade.
Modified duration is a measure of a specific bond’s interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. LHYAX has a modified duration of 3.24, which suggests that the fund will decline 3.24% for every hundred-basis-point increase in interest rates.
LHYAX carries a beta of 0.18, 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 5.37, which measures performance on a risk-adjusted basis.