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

Objective

We note that LALDX is a Government Bond - Short option, an area packed with various choices. Have securities issued by the United States' federal government in their portfolios. Generally, these are seen as extremely low risk from a default perspective and often regarded as risk-free. Government Bond - Short funds focus on the short end of the curve, which results in lower yields, but less sensitivity to interest rate fluctuations.

History of Fund/Manager

Lord Abbett is based in Jersey City, NJ, and is the manager of LALDX. Since Lord Abbett Short Duration Income A made its debut in November of 1993, LALDX has garnered more than $7.41 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 1.48%, 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 0.36%, 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 LALDX over the past three years is 2.42% compared to the category average of 13.08%. The standard deviation of the fund over the past 5 years is 3.88% compared to the category average of 14.01%. 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 0.18, 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, LALDX has 37.62% in high quality bonds rated at least 'AA' or higher, while 52.88% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of A, and focuses on high quality securities.

Expenses

Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, LALDX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.92%. So, LALDX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment has no minimum amount.

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 similar performance, better downside risk, and lower fees, Lord Abbett Short Duration Income A ( LALDX ) 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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