Is SEKSX A Strong Bond Fund Right Now?

Having trouble finding a Muni - Bonds fund? Well, AI Kansas Tax-Exempt Bond I SEKSX would not be a good potential starting point right now. SEKSX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify SEKSX 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

SEKSX is a part of the AIF family of funds, a company based out of New York, NY. Since AI Kansas Tax-Exempt Bond I made its debut in December of 1990, SEKSX has garnered more than $158.88 million in assets. The fund's current manager, Robert A. Campbell, has been in charge of the fund since August of 2000.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 1.99%, and it sits in the bottom 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 1.13%, 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. The standard deviation of SEKSX over the past three years is 1.97% compared to the category average of 6.8%. The fund's standard deviation over the past 5 years is 3.15% compared to the category average of 3.6%. 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, SEKSX is a no load fund. It has an expense ratio of 0.48% compared to the category average of 0.69%. SEKSX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $3 million; each subsequent investment needs to be at least $5,000.

Bottom Line

Overall, AI Kansas Tax-Exempt Bond I has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, AI Kansas Tax-Exempt Bond I looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Muni - Bonds, make sure to go to www.zacks.com/funds/mutual-funds 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.