Any investors hoping to find a Government Bond - Short fund could think about starting with Lord Abbett Short Duration Income C (LDLAX). LDLAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

LDLAX is one of many Government Bond - Short funds to choose from. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government Bond - Short funds hold securities issued by the federal government of the United States. Focusing on the short end of the curve, this category can result in n lower yields, but less sensitivity to interest rate fluctuations.

History of Fund/Manager

LDLAX is a part of the Lord Abbett family of funds, a company based out of Jersey City, NJ. Lord Abbett Short Duration Income C made its debut in July of 1996, and since then, LDLAX has accumulated about $1.43 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 0.9%, and is 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 -0.08%, 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 LDLAX over the past three years is 2.39% compared to the category average of 13.08%. The fund's standard deviation over the past 5 years is 3.81% compared to the category average of 14.01%. This makes the fund less volatile than its peers over the past half-decade.

LDLAX carries a beta of 0.26, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.46, 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, LDLAX 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

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, LDLAX is a no load fund. It has an expense ratio of 1.21% compared to the category average of 0.92%. LDLAX is actually more expensive than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $1,500 and that 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 C ( LDLAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, better downside risk, and higher fees, this fund looks like a good potential choice for investors right now.

This could just be the start of your research on LDLAXin the Government Bond - Short category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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