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Is BMSAX a Strong Bond Fund Right Now?

Any investors hoping to find a Mutual Fund Bond fund might consider looking past Blackrock Credit Strategies Income A (BMSAX). BMSAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of BMSAX. Blackrock Credit Strategies Income A made its debut in March of 2010, and since then, BMSAX has accumulated about $166.40 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. BMSAX has a 5-year annualized total return of 0.82% and is 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 1.46%, which places it in the bottom third during this time-frame.

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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. Over the past three years, BMSAX's standard deviation comes in at 6.09%, compared to the category average of 13.11%. The fund's standard deviation over the past 5 years is 7.27% compared to the category average of 13.21%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.34, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, BMSAX has a negative alpha of -0.28, 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, BMSAX has 55.75% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 24.2%, giving BMSAX an average quality of BBB. This means that it focuses on medium quality securities.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, BMSAX is a load fund. It has an expense ratio of 0.87% compared to the category average of 0.75%. Looking at the fund from a cost perspective, BMSAX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.

Bottom Line

Overall, Blackrock Credit Strategies Income A ( BMSAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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