Is BCOSX a strong bond fund right now?

If you’re stuck searching for diversified bond funds, consider the Baird Core Plus Bond Investor (BCOSX – Free report) as a possibility. BCOSX carries a Zacks Mutual Fund Rank #2 (Buy), which is based on various forecasting factors such as size, cost, and past performance.

objective

We classify BCOSX in the diversified bond category, an area full of potential options. Diversified bond funds provide exposure to a wide range of fixed income types, spanning different issuers, credit levels, and maturities. In general, bond funds here will have significant exposure to government debt, as well as modest holdings in the corporate bond market as well.

History of the fund/manager

BCOSX finds itself within the Baird family, headquartered in Milwaukee, Wisconsin. The Baird Core Plus Bond investor debuted in September of 2000 and BCOSX has accumulated approximately $1.14 billion in assets, according to the most recent information available. A team of investment professionals is the current manager of the fund.

performance

It is clear that what investors are looking for in these funds is strong performance compared to their peers. This fund generated a 5-year total annual return of 0.3%, ranking third among peers in its category. If you’re interested in shorter time frames, don’t neglect to look at the fund’s 3-year TSR of 6.43%, which puts it in the middle third over that time frame.

It is important to note that product returns may not reflect all product expenses. Any fees not reflected would reduce returns. Total returns do not reflect the fund’s returns [%] Sale charge. If sales fees had been included, the total proceeds would have been lower.

When looking at a fund’s performance, it is also important to note the standard deviation of returns. The lower the standard deviation, the less volatility the fund experiences. Over the past three years, BCOSX’s standard deviation has been 6.22%, compared to the category average of 9.13%. Over the past five years, the fund’s standard deviation has been 6.22% compared to the category average of 9.76%. This makes the fund less volatile than its peers over the past half-decade.

Duration of the bond

Adjusted duration is a measure of the interest rate sensitivity of a given bond, and is an excellent way to judge how fixed income securities will respond to a changing interest rate environment.

If you think interest rates will rise, this is an important factor to consider. BCOSX has an adjusted duration of 5.87, which indicates that the fund will decline 5.87% for every one-hundred basis point increase in interest rates.

income

It is important to take into account the fund’s average coupon because income is often a great reason to purchase a fixed income security. This measure calculates the fund’s average returns in a given year. For example, this fund’s average coupon of 3.88% means that a $10,000 investment should yield an annual return of $388.

While a higher coupon is useful when you want a solid level of current income, it may pose a reinvestment risk if rates are lower in the future compared to the bond’s initial purchase date. Income is only one part of the bond picture, and investors also need to consider risks related to broad parameters.

This fund has a beta of 0.92, which means it is less volatile than a broad market index of fixed-income securities. With this in mind, BCOSX has a positive alpha of 0.47, which measures performance on a risk-adjusted basis.

Expenses

Costs are becoming increasingly important for mutual fund investing, especially as competition in this market intensifies. All things being equal, a less expensive product will outperform its comparable counterpart, so taking a close look at these metrics is key for investors. In terms of fees, BCOSX is a no-load fund. The expense ratio is 0.55% compared to the category average of 0.82%. So, BCOSX is actually cheaper than its peers from a cost perspective.

This fund requires a minimum initial investment of $2,500, and each subsequent investment must be at least $100.

Fees charged by investment advisors have not been taken into account. Returns would be lower if they were included.