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Is AHITX a Strong Bond Fund Right Now?

On the lookout for a Mutual Fund Bond fund? Starting with American Funds High Income Trust A (AHITX) is one possibility. AHITX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Funds is based in Los Angeles, CA, and is the manager of AHITX. The American Funds High Income Trust A made its debut in February of 1988 and AHITX has managed to accumulate roughly $10.89 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 6.31%, and it sits 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 7.42%, 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. Over the past three years, AHITX's standard deviation comes in at 9.3%, compared to the category average of 14.78%. Looking at the past 5 years, the fund's standard deviation is 7.38% compared to the category average of 12.21%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.34, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, AHITX has a positive alpha of 4.8, which measures performance on a risk-adjusted basis.

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, AHITX is a load fund. It has an expense ratio of 0.70% compared to the category average of 1%. So, AHITX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.

Bottom Line

Overall, American Funds High Income Trust A ( AHITX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Your research on the Mutual Fund Bond segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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