If you’ve been stuck searching for High Yield – Bonds funds, consider PGIM Floating Rate Income Z (FRFZX) as a possibility. FRFZX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
FRFZX is part of the High Yield – Bonds section, which is a segment that boasts many possible options. Often referred to as ” junk ” bonds, High Yield – Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
FRFZX is a part of the PGIM family of funds, a company based out of Providence, RI. PGIM Floating Rate Income Z debuted in March of 2011. Since then, FRFZX has accumulated assets of about $1.96 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 7.82%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.34%, which places it in the middle 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 11.31%, the standard deviation of FRFZX over the past three years is 4.19%. The standard deviation of the fund over the past 5 years is 4.22% compared to the category average of 11.04%. This makes the fund less volatile than its peers over the past half-decade.
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. FRFZX has a modified duration of 0.1, which suggests that the fund will decline 0.1% for every hundred-basis-point increase in interest rates.