There are plenty of choices in the Muni – Bonds category, but where should you start your research? Well, one fund that may not be worth investigating is Invesco High Yield Municipals A (ACTHX). ACTHX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Zacks categorizes ACTHX as Muni – Bonds, which is a segment packed with options. Muni – Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are ” general obligation ” and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.
Invesco is based in Kansas City, MO, and is the manager of ACTHX. Invesco High Yield Municipals A debuted in January of 1986. Since then, ACTHX has accumulated assets of about $4.82 billion, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Investors naturally seek funds with strong performance. ACTHX has a 5-year annualized total return of 0.26% and it sits in the bottom 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 0.18%, 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. The standard deviation of ACTHX over the past three years is 10.26% compared to the category average of 13.05%. The standard deviation of the fund over the past 5 years is 9.89% compared to the category average of 14.02%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.97, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, ACTHX has a positive alpha of 0.61, which measures performance on a risk-adjusted basis.