Loomis Sayles Bond Fund

Scorecard
4 / 5 Stars
Lipper
5 4 1 3 1
Zacks Investment Research
1 (Strong Buy)
Standard & Poor's
4 / 5 Stars
TheStreet.com
C (Hold)

#7 in Multisector Bond

U.S. News evaluated 82 Multisector Bond Funds. Our list highlights the top-rated funds for long-term investors based on the ratings of leading fund industry researchers.

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Performance

The fund has returned 7.14 percent over the past year, 7.92 percent over the past three years, 15.49 percent over the past five years, and 8.11 percent over the past decade. 

Trailing Returns Updated 02.28.2014
Year to date 2.3%
1 Year 7.1%
3 Years (Annualized) 7.9%
5 Years (Annualized) 15.5%
10 Years (Annualized) 8.1%

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Summary

Loomis Sayles Bond turns junk into gold.

As of March 05, 2014, the fund has assets totaling almost $22.70 billion invested in 617 different holdings. Its portfolio consists of a variety of different types of bonds.

So far, this fund has been having a strong year. Through May, it was up more than 7 percent. Overall, outperformance is the norm rather than the exception for this fund, which invests in a combination of corporate bonds, convertible bonds, and sovereign debt of other countries (including Ireland, Norway, and Canada). While bulk of the fund's corporate exposure is domestic, management also invests a substantial chunk of the portfolio in foreign corporate debt. Another notable feature is the fund's avoidance of bonds issued by the U.S. government. As of the end of the first quarter, the fund had only a tiny amount invested in U.S. treasuries. The fund has returned 7.14 percent over the past year and 7.92 percent over the past three years. 

Management has no qualms about taking on credit risk. The fund's average credit quality is BB (junk status). Management has also been known to make currency plays. Says Morningstar: "The team has taken full advantage of the fund's ability to invest in currencies outside the U.S. and Canada, in an effort to hedge against the weakening U.S. dollar." The fund has returned 15.49 percent over the past five years and 8.11 percent over the past decade. 

Investment Strategy

According to the fund's prospectus: "[Management] generally seeks fixed-income securities of issuers whose credit profiles it believes are improving. Loomis Sayles' credit research team provides deep fundamental and quantitative analysis as well as ratings on over 1,000 issuers worldwide. The broad coverage combined with the objective of identifying attractive investment opportunities makes this an important component of the investment approach."

Role in Portfolio

Morningstar calls the fund a "supporting player."

Management

A team of four managers runs the fund.

Fees

Loomis Sayles Bond Fund has an expense ratio of 0.63 percent.

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Risk

Management's exposure to junk bonds comes with some risks.

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Fund Opinions

The fund's Value Line Overall Rank, a measure of risk-adjusted performance and relative growth in fund returns, is 2 on a scale of 1 to 5, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Growth Persistence rank, which awards funds that consistently outperform their broad universes, is 2 for one year, 1 for five years, and 1 for 10 years. Scores are on a 1 to 5 scale, with 1 being the best and 5 the worst.

Value Line 2014-03-12

The fund's Value Line Risk Rank, a measure of volatility, is 4 on a scale of 1 to 5, with 1 being the least volatile and 5 the most.

Value Line 2014-03-12

The fund appears on the 2011 "Kiplinger 25" list of the best no-load mutual funds.

Kiplinger 25 2011-04-13

In the June 2010 edition of Louis Rukeyser’s Mutual Funds, Benjamin Shepherd says, "Having been in the industry for more than 40 years, Dan Fuss has been one of the greats of the bond fund world for decades and topping out his category on both a 5- and 10-year basis. Though [the fund] hasn't made an appearance in the Rukeyser 100 since September 2008, a year when Fuss's penchant for coporate bonds pushed the fund to a 22 percent loss during the credit crisis, it has generated solid long-term returns. And those long-term results and the experience driving them are just what investors should be looking to."

2010-08-05

We think [Manager Dan] Fuss is one of the best bond fund managers in the business, with his nearly 50 years of investment experience providing an invaluable perspective on the markets. He is a disciplined, patient, and independent thinker, willing to stand apart from the market consensus when his analysis indicates it will be profitable to do so.

Litman Gregory 2010-06-30