There are plenty of choices in the Diversified Bonds category, but where should you start your research? Well, one fund that may not be worth investigating is Metropolitan West Total Retail Bond M (MWTRX). MWTRX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

MWTRX 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

Metropolitan is based in Los Angeles, CA, and is the manager of MWTRX. Metropolitan West Total Retail Bond M debuted in April of 1997. Since then, MWTRX has accumulated assets of about $3.62 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of -0.43%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of -4.47%, which places it in the bottom 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. Compared to the category average of 12.83%, the standard deviation of MWTRX over the past three years is 8.26%. The standard deviation of the fund over the past 5 years is 7.03% compared to the category average of 13.5%. This makes the fund less volatile than its peers over the past half-decade.

This fund has a beta of 1.12, meaning that it is more volatile than a broad market index of fixed income securities. Taking this into account, MWTRX has a positive alpha of 0.03, 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, MWTRX has 71.1% in high quality bonds rated at least 'AA' or higher, while 20.47% 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

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, MWTRX is a no load fund. It has an expense ratio of 0.68% compared to the category average of 0.89%. Looking at the fund from a cost perspective, MWTRX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $5,000; 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, even with its comparatively weak performance, better downside risk, and lower fees, Metropolitan West Total Retail Bond M ( MWTRX ) has a low Zacks Mutual Fund rank, and therefore looks a somewhat weak choice for investors right now.

Want even more information about MWTRX? 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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