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Is BMSAX a Strong Bond Fund Right Now?

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·3-min read
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Having trouble finding a Mutual Fund Bond fund? Well, Blackrock Credit Strategies Income A (BMSAX) would not be a good potential starting point right now. BMSAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine 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. The Blackrock Credit Strategies Income A made its debut in March of 2010 and BMSAX has managed to accumulate roughly $188.12 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. BMSAX has a 5-year annualized total return of 1.44% 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 1.26%, 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. The standard deviation of BMSAX over the past three years is 8.04% compared to the category average of 12.9%. The fund's standard deviation over the past 5 years is 6.5% compared to the category average of 11.33%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.45, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, BMSAX has a positive alpha of 0.46, 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 's junk bond component-bonds rated 'BB' or below-is at 64.35%. This means that the fund has an average quality of BBB, and 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 0.77%. 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, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into BMSAX too 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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