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Is HICOX a Strong Bond Fund Right Now?

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Any investors hoping to find a Muni - Bonds fund could think about starting with Colorado Bond Shares Tax-Exempt A (HICOX - Free Report) . HICOX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

We classify HICOX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.

History of Fund/Manager

HICOX is a part of the Freedom Funds family of funds, a company based out of Denver, CO. Since Colorado Bond Shares Tax-Exempt A made its debut in June of 1987, HICOX has garnered more than $1.75 billion in assets. The fund's current manager, Fred R. Kelly Jr.Has been in charge of the fund since November of 1990.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. HICOX has a 5-year annualized total return of 3.16% and is 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 1.83%, 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, HICOX's standard deviation comes in at 5.79%, compared to the category average of 6.37%. The standard deviation of the fund over the past 5 years is 5.28% compared to the category average of 5.52%. This makes the fund less volatile than its peers over the past half-decade.

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, HICOX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.75%. HICOX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $500, investors should also note that there is no minimum for each subsequent investment.

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

Bottom Line

Overall, Colorado Bond Shares Tax-Exempt A ( HICOX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Colorado Bond Shares Tax-Exempt A ( HICOX ) looks like a good potential choice for investors right now.

For additional information on the Muni - Bonds 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 HICOX too 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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