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Is PIGIX a Strong Bond Fund Right Now?

Have you been searching for a Mutual Fund Bond fund? You might want to begin with PIMCO Investment Grade Corporate Institutional (PIGIX). PIGIX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

PIGIX is a part of the PIMCO Funds family of funds, a company based out of Newport Beach, CA. PIMCO Investment Grade Corporate Institutional made its debut in March of 2000, and since then, PIGIX has accumulated about $9.80 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 4.61%, 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 6.87%, which places it in the middle 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. Compared to the category average of 13.51%, the standard deviation of PIGIX over the past three years is 7.46%. Looking at the past 5 years, the fund's standard deviation is 6.19% compared to the category average of 11.17%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.52, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, PIGIX has a positive alpha of 0.87, 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, PIGIX has 63.84% in medium quality bonds, with ratings of 'A' to 'BBB'. The fund's junk bond component-bonds rated 'BB' or below-is at 24.64%, giving PIGIX an average quality of BBB. This means that it focuses on medium 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, PIGIX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.85%. From a cost perspective, PIGIX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment has no minimum amount.

Bottom Line

Overall, PIMCO Investment Grade Corporate Institutional ( PIGIX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat average 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. 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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