Is ECMMX a Strong Bond Fund Right Now?

On the lookout for a Muni - Bonds fund? Starting with Eaton Vance MA Municipals C (ECMMX) should not be a possibility at this time. ECMMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes ECMMX as Muni - Bonds, which is a segment packed with options. Muni - Bonds funds invest in debt securities issued by states or local municipalities. These are generally used to finance construction of infrastructure, pay for schools, or other government functions. Some are backed by taxes (revenue bonds), while others are " general obligation " and may not be backed by a defined source. Investors usually appreciate the tax benefits that come with many municipal bonds, which are especially impressive for those in high tax brackets.

History of Fund/Manager

Eaton Vance is based in Boston, MA, and is the manager of ECMMX. Since Eaton Vance MA Municipals C made its debut in July of 2006, ECMMX has garnered more than $1.44 million in assets. Craig Brandon is the fund's current manager and has held that role since February of 2010.

Performance

Investors naturally seek funds with strong performance. ECMMX has a 5-year annualized total return of -1.4% and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 0.05%, which places it in the bottom third during this time-frame.

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It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.

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. Over the past three years, ECMMX's standard deviation comes in at 7.32%, compared to the category average of 11.5%. Looking at the past 5 years, the fund's standard deviation is 6.31% compared to the category average of 11.05%. 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, so when judging how fixed income securities will respond in a shifting rate environment, it is an excellent figure to look at.

For investors who think interest rates will rise, this is an important factor to consider. ECMMX has a modified duration of 8.53, which suggests that the fund will decline 8.53% for every hundred-basis-point increase in interest rates.

This fund has a beta of 0.75, meaning that it is less volatile than a broad market index of fixed income securities. Taking this into account, ECMMX has a negative alpha of -1.87, which measures performance on a risk-adjusted basis.

Ratings

Investors should also consider a bond's rating, which is a grade ( 'AAA' to 'D' ) given to a bond that indicates its credit quality. With this letter scale in mind, ECMMX has 69.8% in high quality bonds rated at least 'AA' or higher, while 24.24% are of medium quality, with ratings of 'A' to 'BBB'. The fund has an average quality of AA, and focuses on high quality securities.

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, ECMMX is a no load fund. It has an expense ratio of 1.47% compared to the category average of 0.84%. From a cost perspective, ECMMX is actually more expensive than its peers.

This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Eaton Vance MA Municipals C ( ECMMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Eaton Vance MA Municipals C ( ECMMX ) looks like a somewhat weak choice for investors right now.

This could just be the start of your research on ECMMXin 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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This article originally published on Zacks Investment Research (zacks.com).

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