If you’ve been stuck searching for Diversified Bonds funds, you might want to consider passing on by Putnam Diversified Income Y (PDVYX) as a possibility. PDVYX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

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PDVYX is one of many Diversified Bonds funds to choose from. Diversified Bonds funds give investors exposure to a variety of fixed income types that span across different issuers, maturities, and credit levels. Usually, these funds will have a good amount of exposure to government debt, in addition to modest holdings in the corporate bond market.

PDVYX finds itself in the Putnam Funds family, based out of Canton, MA. Putnam Diversified Income Y made its debut in October of 1998, and since then, PDVYX has accumulated about $450.68 million in assets, per the most up-to-date date available. A team of investment professionals is the fund’s current manager.

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 0.62%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 2.72%, which places it in the middle third during this time-frame.

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.

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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, PDVYX’s standard deviation comes in at 5.39%, compared to the category average of 12.62%. The fund’s standard deviation over the past 5 years is 7.92% compared to the category average of 13.66%. This makes the fund less volatile than its peers over the past half-decade.

PDVYX carries a beta of 0.49, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.15, which measures performance on a risk-adjusted basis.

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, PDVYX has 43.87% in high quality bonds rated at least ‘AA’ or higher, while its junk bond component-bonds rated ‘BB’ or below-is at 31.33%. This means that the fund has an average quality of A, and focuses on high quality securities.

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