In This Article:
Any investors hoping to find a Muni - Bonds fund could think about starting with Goldman Sachs High Yield Municipals A (GHYAX). GHYAX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
GHYAX 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
Goldman Sachs is based in New York, NY, and is the manager of GHYAX. The Goldman Sachs High Yield Municipals A made its debut in April of 2000 and GHYAX has managed to accumulate roughly $377.94 million in assets, as of the most recently available information. Ben Barber is the fund's current manager and has held that role since April of 2000.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.23%, and it sits 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 5.46%, 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. The standard deviation of GHYAX over the past three years is 3.98% compared to the category average of 7.71%. Over the past 5 years, the standard deviation of the fund is 3.44% compared to the category average of 7.77%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. GHYAX has a modified duration of 6.47, which suggests that the fund will decline 6.47% for every hundred-basis-point increase in interest rates.
Income
We must remember to consider the fund's average coupon, as income is traditionally a big reason for purchasing a fixed income security. A fund's average coupon is simply its average payout in a given year. For example, this fund's average coupon of 4.97% means that a $10,000 investment should result in a yearly payout of $497.