Academic archive

If investors are looking at the Government Bond - Short fund category, Lord Abbett Short Duration Income A (LALDX) could be a potential option. LALDX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Government Bond - Short funds is an area filled with options, such as LALDX. Government Bond - Short funds hold securities issued by the federal government of the United States of America. These are seen as extremely low risk securities from a default perspective, and are often regarded as risk-free assets. This category focuses on the short end of the curve, and that results in lower yields, but also less sensitivity to interest rate fluctuations, too.

History of Fund/Manager

Lord Abbett is responsible for LALDX, and the company is based out of Jersey City, NJ. Lord Abbett Short Duration Income A debuted in November of 1993. Since then, LALDX has accumulated assets of about $7.19 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

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 2.82%, 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 3.69%, which places it in the middle 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. LALDX's standard deviation over the past three years is 2.38% compared to the category average of 12.66%. Looking at the past 5 years, the fund's standard deviation is 2.31% compared to the category average of 12.37%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.26, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, LALDX has a positive alpha of 1.11, which measures performance on a risk-adjusted basis.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, LALDX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.91%. So, LALDX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,500, 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, Lord Abbett Short Duration Income A ( LALDX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about LALDX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Get Your Free (LALDX): Fund Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research