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Is TRBUX a Strong Bond Fund Right Now?

There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that might be worth investigating is T. Rowe Price Ultra Short-Term Bond (TRBUX). TRBUX bears 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

T. Rowe Price is based in Baltimore, MD, and is the manager of TRBUX. Since T. Rowe Price Ultra Short-Term Bond made its debut in December of 2012, TRBUX has garnered more than $1.85 billion in assets. Alexander Obaza is the fund's current manager and has held that role since March of 2020.


Obviously, what investors are looking for in these funds is strong performance relative to their peers. TRBUX has a 5-year annualized total return of 1.85% and it sits 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 1.53%, 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. TRBUX's standard deviation over the past three years is 1.18% compared to the category average of 8.3%. The standard deviation of the fund over the past 5 years is 1.6% compared to the category average of 8.34%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.08, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, TRBUX has a positive alpha of 0.4, which measures performance on a risk-adjusted basis.


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, TRBUX has 29.8% in high quality bonds rated at least 'AA' or higher, while 69% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.


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, TRBUX is a no load fund. It has an expense ratio of 0.31% compared to the category average of 0.66%. So, TRBUX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, T. Rowe Price Ultra Short-Term Bond ( TRBUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

For additional information on the Mutual Fund Bond area of the mutual fund world, make sure to check out There, you can see more about the ranking process, and dive even deeper into TRBUX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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