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If you have been looking for Mutual Fund Bond fund category, a potential starting could be T. Rowe Price Tax Free Income Adviser (PATAX - Free Report) . PATAX has 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
T. Rowe Price is based in Baltimore, MD, and is the manager of PATAX. Since T. Rowe Price Tax Free Income Adviser made its debut in October of 1976, PATAX has garnered more than $47 million in assets. Konstantine B. Mallas is the fund's current manager and has held that role since July of 2007.
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 0.21%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -2.91%, 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. Over the past three years, PATAX's standard deviation comes in at 6.61%, compared to the category average of 11.94%. Over the past 5 years, the standard deviation of the fund is 6.23% compared to the category average of 12.48%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.89, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PATAX has a negative alpha of -0.74, 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, PATAX has 45.05% in high quality bonds rated at least 'AA' or higher, while 43.31% are of medium quality, with ratings of 'A' to 'BBB'. 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, PATAX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 0.78%. Looking at the fund from a cost perspective, PATAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Tax Free Income Adviser ( PATAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, this fund 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 PATAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is PATAX a Strong Bond Fund Right Now?
If you have been looking for Mutual Fund Bond fund category, a potential starting could be T. Rowe Price Tax Free Income Adviser (PATAX - Free Report) . PATAX has 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
T. Rowe Price is based in Baltimore, MD, and is the manager of PATAX. Since T. Rowe Price Tax Free Income Adviser made its debut in October of 1976, PATAX has garnered more than $47 million in assets. Konstantine B. Mallas is the fund's current manager and has held that role since July of 2007.
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 0.21%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -2.91%, 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. Over the past three years, PATAX's standard deviation comes in at 6.61%, compared to the category average of 11.94%. Over the past 5 years, the standard deviation of the fund is 6.23% compared to the category average of 12.48%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.89, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PATAX has a negative alpha of -0.74, 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, PATAX has 45.05% in high quality bonds rated at least 'AA' or higher, while 43.31% are of medium quality, with ratings of 'A' to 'BBB'. 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, PATAX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 0.78%. Looking at the fund from a cost perspective, PATAX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $100
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, T. Rowe Price Tax Free Income Adviser ( PATAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, this fund 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 PATAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.