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Is OIBAX a Strong Bond Fund Right Now?

Any investors who are searching for Mutual Fund Bond funds should take a look at Oppenheimer International Bond A (OIBAX). OIBAX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.

History of Fund/Manager

Invesco is based in Kansas City, MO, and is the manager of OIBAX. Since Oppenheimer International Bond A made its debut in June of 1995, OIBAX has garnered more than $448.60 million in assets. The fund is currently managed by 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 -2.51%, and is in the bottom 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 -0.57%, which places it in the middle 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. OIBAX's standard deviation over the past three years is 11.73% compared to the category average of 15.78%. The fund's standard deviation over the past 5 years is 12.3% compared to the category average of 13.84%. This makes the fund less volatile than its peers over the past half-decade.

OIBAX carries a beta of 0.56, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -3.04, 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, OIBAX has 30.18% in high quality bonds rated at least 'AA' or higher, while 20.05% are of medium quality, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 45.87%, giving OIBAX an average quality of BBB. This means that it focuses on medium quality securities.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, OIBAX is a load fund. It has an expense ratio of 1.16% compared to the category average of 0.88%. Looking at the fund from a cost perspective, OIBAX 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

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 OIBAX too 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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Zacks Investment Research