Is TAIAX a Strong Bond Fund Right Now?
Muni - Bonds fund seekers should consider taking a look at American Funds Tax-Advantaged Income A (TAIAX). TAIAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
TAIAX is one of many Muni - Bonds funds to choose from. Muni - Bonds funds invest in debt securities issued by states and local municipalities, which are typically used to pay for infrastructure construction, schools, and other government functions. These securities can be backed by taxes (revenue bonds), but others are known as " general obligation " and are not necessarily backed by a defined source. These bonds are especially attractive because of their inherent tax benefits.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of TAIAX. American Funds Tax-Advantaged Income A made its debut in May of 2012, and since then, TAIAX has accumulated about $3.85 billion in assets, per the most up-to-date date available. The fund's current manager is 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 7.92%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of 6.81%, which places it in the top 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.
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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 TAIAX over the past three years is 9.96% compared to the category average of 12.99%. Looking at the past 5 years, the fund's standard deviation is 9.33% compared to the category average of 12.63%. This makes the fund less volatile than its peers over the past half-decade.
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, TAIAX is a load fund. It has an expense ratio of 0.32% compared to the category average of 0.91%. TAIAX is actually cheaper than its peers when you consider factors like cost.