Newly Rated Bond Funds Debut at a Bad Time - TheStreet

Newly Rated Bond Funds Debut at a Bad Time

TheStreet.com Ratings introduced both these funds at 'E,' the lowest possible grade.
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This month, two new bond funds made the list of more than 5,000 bond funds rated by TheStreet.com and, as expected, have made their debut at a very difficult time. Both funds have earned the lowest possible rating grade of E.

The current market returns, as shown by the one- and three-month figures, make it hard to swallow the 4.5% front load that these funds carry.

If you have to choose a category for bonds, the lower-risk

Principal Inflation Protection Fund

(PITAX) - Get Report

, which invests in investment grade securities, would be an option. The inflation-protected bonds that it invests in are suited for the times. However, preservation of capital should be the overriding concern for investors at present, and investments in bond funds should be limited to short-term Treasuries.

Fund Name

Ticker

TSC Rating

1 Month Return

3 Month Return

Category

Front Load

Principal Infl Prot A

PITAX

E

0.8

-0.93

General Bd - Investment Grade

4.5

Principal Preferred Sec A

PPSAX

E-

-5.55

-3.72

US Government - Short & Interm

4.5

Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.

In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.

While Patel cannot provide investment advice or recommendations, he appreciates your feedback;

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