Is PSLDX a Strong Bond Fund Right Now?

If you have been looking for Government - Bonds: Misc funds, a place to start could be PIMCO StockPlus Long Duration Institutional (PSLDX). PSLDX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

PSLDX is one of many Government - Bonds: Misc funds to choose from. In their portfolios,Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.

History of Fund/Manager

PIMCO Funds is based in Newport Beach, CA, and is the manager of PSLDX. Since PIMCO StockPlus Long Duration Institutional made its debut in August of 2007, PSLDX has garnered more than $586.12 million in assets. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 9.07%, and it sits in the top 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 23.43%, which places it in the top third during this time-frame.

It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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 PSLDX over the past three years is 23.97% compared to the category average of 12.94%. The fund's standard deviation over the past 5 years is 26.27% compared to the category average of 13.06%. This makes the fund more volatile than its peers over the past half-decade.

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, PSLDX is a no load fund. It has an expense ratio of 0.59% compared to the category average of 0.46%. From a cost perspective, PSLDX is actually more expensive than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1.00 million; each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively strong performance, worse downside risk, and higher fees, PIMCO StockPlus Long Duration Institutional ( PSLDX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.

This could just be the start of your research on PSLDX in the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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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This article originally published on Zacks Investment Research (zacks.com).

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