Is RPSIX a Strong Bond Fund Right Now?

·3 min read

If you've been stuck searching for Diversified Bonds funds, consider T. Rowe Price Spectrum Income (RPSIX) as a possibility. RPSIX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify RPSIX in the Diversified Bonds category, an area that is rife with potential choices. Diversified Bonds funds offer exposure to a wide variety of fixed income types, stretching across various issuers, credit levels, and maturities. Generally speaking, bond funds here will have sizable exposure to government debt, as well as modest holdings in the corporate bond market too.

History of Fund/Manager

T. Rowe Price is based in Baltimore, MD, and is the manager of RPSIX. T. Rowe Price Spectrum Income made its debut in June of 1990, and since then, RPSIX has accumulated about $4.93 billion in assets, per the most up-to-date date available. The fund's current manager, Charles Shriver, has been in charge of the fund since May of 2011.

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 4.38%, 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 5.86%, which places it in the top third during this time-frame.

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, RPSIX's standard deviation comes in at 6.95%, compared to the category average of 7.76%. The standard deviation of the fund over the past 5 years is 5.6% compared to the category average of 6.34%. This makes the fund less volatile than its peers over the past half-decade.

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, RPSIX is a no load fund. It has an expense ratio of 0.28% compared to the category average of 0.85%. So, RPSIX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.

Bottom Line

Overall, T. Rowe Price Spectrum Income ( RPSIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Diversified Bonds funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare RPSIX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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