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Is American Beacon Sound Point Floating Rate Institutional (SPFLX) a Strong Mutual Fund Pick Right Now?

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On the lookout for a Mutual Fund Equity Report fund? Starting with American Beacon Sound Point Floating Rate Institutional (SPFLX - Free Report) should not be a possibility at this time. SPFLX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Beacon is based in Irving, TX, and is the manager of SPFLX. Since American Beacon Sound Point Floating Rate Institutional made its debut in December of 2015, SPFLX has garnered more than $37.78 million in assets. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. SPFLX has a 5-year annualized total return of 1.44% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 4.97%, which places it in the middle 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 SPFLX over the past three years is 4.62% compared to the category average of 12.73%. The fund's standard deviation over the past 5 years is 8.5% compared to the category average of 13.83%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.23, which means it is hypothetically less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. SPFLX has generated a positive alpha over the past five years of 0.42, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, SPFLX is a no load fund. It has an expense ratio of 0.82% compared to the category average of 0.79%. Looking at the fund from a cost perspective, SPFLX is actually more expensive than its peers.

While the minimum initial investment for the product is $250,000, investors should also note that each subsequent investment needs to be at least $50.

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

Bottom Line

Overall, American Beacon Sound Point Floating Rate Institutional ( SPFLX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, better downside risk, and higher fees, American Beacon Sound Point Floating Rate Institutional ( SPFLX ) looks like a somewhat weak choice for investors right now.

Want even more information about SPFLX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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