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There are plenty of choices in the Mutual Fund Bond category, but where should you start your research? Well, one fund that may not be worth investigating is Putnam Diversified Income A (PDINX - Free Report) . PDINX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDINX. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $603.58 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of -0.5%, and it sits 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 0.94%, which places it in the bottom 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 13.87%, the standard deviation of PDINX over the past three years is 5.19%. The fund's standard deviation over the past 5 years is 7.64% compared to the category average of 13.83%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.07, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a negative alpha of -1.59, 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, PDINX has 56.06% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 25.74%. This means that 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, PDINX is a load fund. It has an expense ratio of 1.01% compared to the category average of 0.83%. So, PDINX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Putnam Diversified Income A ( PDINX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, Putnam Diversified Income A ( PDINX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PDINXin the Mutual Fund Bond 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is PDINX 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 may not be worth investigating is Putnam Diversified Income A (PDINX - Free Report) . PDINX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Putnam Funds is based in Canton, MA, and is the manager of PDINX. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $603.58 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of -0.5%, and it sits 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 0.94%, which places it in the bottom 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 13.87%, the standard deviation of PDINX over the past three years is 5.19%. The fund's standard deviation over the past 5 years is 7.64% compared to the category average of 13.83%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.07, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a negative alpha of -1.59, 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, PDINX has 56.06% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 25.74%. This means that 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, PDINX is a load fund. It has an expense ratio of 1.01% compared to the category average of 0.83%. So, PDINX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Putnam Diversified Income A ( PDINX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, Putnam Diversified Income A ( PDINX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on PDINXin the Mutual Fund Bond 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.