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Is PTSHX a Strong Bond Fund Right Now?

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If you have been looking for Mutual Fund Bond fund category, a potential starting could be PIMCO Short Term Institutional (PTSHX - Free Report) . PTSHX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

PTSHX finds itself in the PIMCO Funds family, based out of Newport Beach, CA. The PIMCO Short Term Institutional made its debut in October of 1987 and PTSHX has managed to accumulate roughly $7.99 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. PTSHX has a 5-year annualized total return of 1.48% and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 1.48%, 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. PTSHX's standard deviation over the past three years is 1.24% compared to the category average of 13.29%. Over the past 5 years, the standard deviation of the fund is 1.95% compared to the category average of 13.2%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.03, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PTSHX has a positive alpha of 0.02, 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, PTSHX has 45.2% in high quality bonds rated at least 'AA' or higher, while 53.8% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, 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, PTSHX is a no load fund. It has an expense ratio of 0.45% compared to the category average of 0.66%. From a cost perspective, PTSHX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $1 million and that each subsequent investment has no minimum amount.

Bottom Line

Overall, PIMCO Short Term Institutional ( PTSHX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and lower fees, PIMCO Short Term Institutional ( PTSHX ) looks like a somewhat average choice for investors right now.

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 PTSHX 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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