NEW YORK (
) -- TheStreet.com Ratings initiated coverage of five fixed income mutual funds that accrued a sufficient track record of risk and performance data by the end of June 2011. Four of these newly rated mutual fund earned initial grades in the 'buy' range and one starts off at 'hold'.
Of the newly rated funds, none ranks higher than
Dreyfus/Standish Global Fixed Inc A
with an initial rating of A-, or Excellent. The fund has an inception date of Dec. 2, 2009. In order to qualify for a rating, an open-end fund must either have three years of risk and return data or be an additional share class of an existing fund with at least three years of performance statistics.
The hypothetical return performance of these A class fund shares would have generated an average return of 9.1% over the last three years based on the expense ratio adjusted performance of the existing institutional class
Dreyfus/Standish Global Fixed Inc I
which began trading in January 1994. The newly rated fund returned 2.0% over the year ending June 30, 2011.
The fund seeks to maximize total return while realizing a market level of income consistent with preserving principal and liquidity. The fund invests all of its investable assets in a Standish Mellon master portfolio in which at least 80 percent of its net assets in U.S. dollar and non-U.S. dollar denominated fixed income securities of governments and companies located in various countries including emerging markets. It invests in 8 or more countries but always invests in at least 3 countries one of which may be the U.S. The fund may also invest in interest rate futures contracts.
The next bond fund also begins with an initial grade of A-, or Excellent. The
Dreyfus/Standish Interm T/E Bd A
began trading on Mar. 31, 2009 and is based on the results of the expense-adjusted, 18 year old
Dreyfus/Standish Interm T/E Bd Ins
. The fund gained 4.1% over the last year and hypothetically generated 5.6% annual performance over the last three years.
The fund seeks to provide a high level of interest income exempt from federal income tax while seeking preservation of shareholders capital. The fund may invest at least 80% of net assets in tax exempt municipal securities issued by states territories and possessions of the United States the District of Columbia and their political subdivisions agencies and instrumentalities.
With an inception date of Jun. 16, 2008,
JPMorgan Total Return A
earned an initial grade of B+ on an average three year performance of 8.8% and one year return of 7.0%. The fund seeks to provide high total return. The fund mainly invests in debt investments, including but not limited to, asset-backed and mortgage-backed securities, U.S. government and agency securities, and corporate debt securities that have the potential to provide a high total return over time.
These securities may be of any maturity, but the management team will keep the duration of the
Total Return A Fund within one year of that of the Lehman Brothers U.S. Aggregate Index. Up to 35 percent of the total assets of the fund may be invested in foreign securities. Up to 65 percent of the total assets of the fund may be invested in securities that are rated investment-grade and up to 35 percent may be invested in securities rated below investment grade.
The last of the newly rated bond funds in the 'buy' range,
Dreyfus Sh-Intmd Muni Bd A
, has an initial rating of B-. This fund, with an inception date of Aug. 3, 2009, is based on
Dreyfus Sh-Intmd Muni Bd D
which has been active since Apr. 30, 1987. Adjusted for the different expense structure, the A class fund shares would have hypothetically resulted in a three year performance of 3.8% annually and a real 2.0% return in the last year. The fund seeks to provide as high a level of current income exempt from federal income tax as is consistent with the preservation of capital.
PIMCO Unconstrained Bond Fund A
begins in the top third of the 'hold' range with a grade of C+. This fund, with an inception date of Jun. 30, 2008, returned 6.8% annually over three years and 2.3% in the last year.
The investment objective of this PIMCO fund is to seek maximum long term return, consistent with preservation of capital and prudent investment management. The fund seeks to achieve its investment objective by investing at least 80% of its assets in a diversified portfolio of fixed income instruments of varying maturities. The fund may also invest without limitation in securities denominated in foreign currencies and in U.S. dollar denominated securities of foreign issuers. The fund may also invest up to 10% of its total assets in preferred stocks. The fund may invest all of its assets in derivative instruments, such as options, futures contracts or swap agreements, or in mortgage or asset backed securities.
TheStreet.com Ratings condenses the available fund performance and risk data into a single composite opinion of each fund's risk-adjusted performance. This allows the unbiased identification of those funds that have historically done well and those that have underperformed the market. While there is no guarantee of future performance, these Investment Ratings provide a solid framework for making informed, timely investment decisions. The funds listed below have reached their three year anniversary.
Funds rated A or B are considered "Buy" rated based on a track record of higher than average risk-adjusted performance. Funds at the C level are rated as "Hold," while underperformers at the D and E levels our model ranks as "Sell."
-- Reported by Kevin Baker in Jupiter, Fla.
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Kevin Baker became the senior financial analyst for TheStreet Ratings upon the August 2006 acquisition of Weiss Ratings by TheStreet.com, covering equity and mutual fund ratings. He joined the Weiss Group in 1997 as a banking and brokerage analyst. In 1999, he created the Weiss Group's first ratings to gauge the level of risk in U.S. equities. Baker received a B.S. degree in management from Rensselaer Polytechnic Institute and an M.B.A. with a finance specialization from Nova Southeastern University.