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Is LDLAX a Strong Bond Fund Right Now?

On the lookout for a Mutual Fund Bond fund? Starting with Lord Abbett Short Duration Income C (LDLAX) is one possibility. LDLAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

LDLAX finds itself in the Lord Abbett family, based out of Jersey City, NJ. Since Lord Abbett Short Duration Income C made its debut in July of 1996, LDLAX has garnered more than $1.91 billion in assets. The fund's current manager is a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 0.9%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 0.7%, which places it in the top 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. The standard deviation of LDLAX over the past three years is 2.62% compared to the category average of 14.07%. Looking at the past 5 years, the fund's standard deviation is 3.73% compared to the category average of 13.94%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.27, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, LDLAX has a negative alpha of -0.45, 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, LDLAX has 43.47% in high quality bonds rated at least 'AA' or higher, while 41.9% 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

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, LDLAX is a no load fund. It has an expense ratio of 1.22% compared to the category average of 0.65%. LDLAX is actually more expensive than its peers when you consider factors like cost.

While the minimum initial investment for the product is $1,500, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Lord Abbett Short Duration Income C ( LDLAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, Lord Abbett Short Duration Income C ( LDLAX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Mutual Fund Bond funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare LDLAX to its peers as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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