Is VSLAX a Strong Bond Fund Right Now?
Looking for a High Yield – Bonds fund? You may want to consider Invesco Senior Loan A (VSLAX) as a possible option. The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
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VSLAX is classified in the High Yield – Bonds segment by Zacks, an area full of investment possibilities. High Yield – Bonds funds come in below investment grade, and are referred to as ” junk ” bonds for this reason. Compared to their investment grade peers, these funds are at a higher default risk, but typically pay out higher yields while posing similar interest rate risks.
Invesco is based in Kansas City, MO, and is the manager of VSLAX. Invesco Senior Loan A debuted in February of 2005. Since then, VSLAX has accumulated assets of about $44.52 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.98%, and is in the bottom 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 5%, which places it in the middle third during this time-frame.
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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. Over the past three years, VSLAX’s standard deviation comes in at 4.33%, compared to the category average of 13.48%. Over the past 5 years, the standard deviation of the fund is 7.95% compared to the category average of 14.18%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of -0.28, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, VSLAX has a positive alpha of 3.32, which measures performance on a risk-adjusted basis.
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, VSLAX is a load fund. It has an expense ratio of 3.11% compared to the category average of 1.04%. Looking at the fund from a cost perspective, VSLAX is actually more expensive than its peers.
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