There are plenty of choices in the Diversified Bonds category, but where should you start your research? Well, one fund that might be worth investigating is Baird Core Plus Bond Investor (BCOSX). BCOSX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

BCOSX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.

History of Fund/Manager

Baird is based in Milwaukee, WI, and is the manager of BCOSX. The Baird Core Plus Bond Investor made its debut in September of 2000 and BCOSX has managed to accumulate roughly $1.17 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 0.47%, and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of -3.01%, 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. The standard deviation of BCOSX over the past three years is 7.25% compared to the category average of 10.72%. Over the past 5 years, the standard deviation of the fund is 6.51% compared to the category average of 10.92%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 0.93, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, BCOSX has a positive alpha of 0.67, 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, BCOSX has 56.9% in high quality bonds rated at least 'AA' or higher, while 40.3% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.

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, BCOSX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 0.80%. BCOSX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Baird Core Plus Bond Investor ( BCOSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about BCOSX? 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.

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