Is MDCMX a Strong Bond Fund Right Now?

Zacks Equity Research
·3-min read

On the lookout for a Muni - Bonds fund? Starting with BlackRock CA Municipals Opportunities A1 (MDCMX) is one possibility. MDCMX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify MDCMX in the Muni - Bonds category, an area rife with potential choices. Muni - Bonds funds focus their investments on debt securities issued by state and local governments. These are typically used to pay for the construction of infrastructure, the operation of public schools, and other municipal functions. These securities can come in the form of revenue bonds, which are backed by taxes, as well as " general obligation " bonds that are not backed by a defined source. Investors are usually interested that come with most municipal bonds, which can be especially important for those in higher tax brackets.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of MDCMX. Since BlackRock CA Municipals Opportunities A1 made its debut in October of 1994, MDCMX has garnered more than $102 million in assets. The fund's current manager is a team of investment professionals.

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 3.16%, 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 2.6%, 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. MDCMX's standard deviation over the past three years is 5.19% compared to the category average of 11.96%. Looking at the past 5 years, the fund's standard deviation is 4.62% compared to the category average of 10.51%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.43, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, MDCMX has a negative alpha of -0.77, which measures performance on a risk-adjusted basis.

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, MDCMX is a no load fund. It has an expense ratio of 0.51% compared to the category average of 0.83%. From a cost perspective, MDCMX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, BlackRock CA Municipals Opportunities A1 ( MDCMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and lower fees, BlackRock CA Municipals Opportunities A1 ( MDCMX ) looks like a good potential choice for investors right now.

This could just be the start of your research on MDCMXin the Muni - Bonds category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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