Is GTRAX a Strong Bond Fund Right Now?

Any investors hoping to find a Diversified Bonds fund could think about starting with PGIM Global Total Return A (GTRAX). GTRAX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Diversified Bonds funds is an area filled with options, such as GTRAX. Investors looking for exposure to a variety of fixed income types that stretch across issuers, maturities, and credit levels will find a good fit with Diversified Bonds funds. Typically, these funds have a solid amount of exposure to government debt, as well as modest holdings in the corporate bond market.

History of Fund/Manager

PGIM is based in Providence, RI, and is the manager of GTRAX. PGIM Global Total Return A made its debut in July of 1986, and since then, GTRAX has accumulated about $326.42 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.68%, and is 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 5.5%, which places it in the top 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. Compared to the category average of 13.53%, the standard deviation of GTRAX over the past three years is 8.09%. The fund's standard deviation over the past 5 years is 7.53% compared to the category average of 11.35%. This makes the fund less volatile than its peers over the past half-decade.

GTRAX carries a beta of 1.54, meaning that the fund is more volatile than a broad market index of fixed income securities. With this in mind, it has a positive alpha of 0.33, 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, GTRAX has 46.42% in high quality bonds rated at least 'AA' or higher, while 43.08% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high 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, GTRAX is a load fund. It has an expense ratio of 0.88% compared to the category average of 0.86%. Looking at the fund from a cost perspective, GTRAX is actually more expensive than its peers.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, PGIM Global Total Return A ( GTRAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, PGIM Global Total Return A ( GTRAX ) looks like a good potential choice for investors right now.

For additional information on the Diversified Bonds 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 GTRAX 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Get Your Free (GTRAX): Fund Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research