Is MEMTX a Strong Bond Fund Right Now?

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This story originally appeared on Zacks

If investors are looking at the Mutual Fund Bond fund category, BlackRock Strategic Municipals Opportunities A (MEMTX) could be a potential option. MEMTX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

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History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of MEMTX. Since BlackRock Strategic Municipals Opportunities A made its debut in October of 2006, MEMTX has garnered more than $1.71 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 3.15%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.76%, which places it in the bottom 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. Compared to the category average of 12.92%, the standard deviation of MEMTX over the past three years is 6.83%. The fund’s standard deviation over the past 5 years is 5.83% compared to the category average of 10.79%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.34, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, MEMTX has a negative alpha of -0.82, 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, MEMTX is a load fund. It has an expense ratio of 0.77% compared to the category average of 0.80%. So, MEMTX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, BlackRock Strategic Municipals Opportunities A ( MEMTX ) 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.

This could just be the start of your research on MEMTXin the Mutual Fund Bond 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.

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