Having trouble finding a High Yield – Bonds fund? Principal High Yield A (CPHYX) is a potential starting point. CPHYX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
CPHYX is part of the High Yield – Bonds section, which is a segment that boasts many possible options. Often referred to as ” junk ” bonds, High Yield – Bonds funds sit below investment grade, meaning they are at a high default risk compared to their investment grade peers. However, one advantage to junk bonds is that they generally pay out higher yields while posing similar interest rate risks to their investment grade counterparts.
CPHYX finds itself in the Principal Financial Group family, based out of Des Moines, IA. Principal High Yield A debuted in April of 1998. Since then, CPHYX has accumulated assets of about $394.53 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 5.66%, and it sits in the middle 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 6.32%, 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 CPHYX over the past three years is 7.46% compared to the category average of 12.08%. Looking at the past 5 years, the fund’s standard deviation is 6.68% compared to the category average of 11.77%. This makes the fund less volatile than its peers over the past half-decade.
With a beta of 0.18, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, CPHYX has a positive alpha of 5.86, which measures performance on a risk-adjusted basis.
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, CPHYX is a load fund. It has an expense ratio of 0.91% compared to the category average of 0.93%. Looking at the fund from a cost perspective, CPHYX is actually cheaper than its peers.
