If you have been looking for Diversified Bonds funds, it would not be wise to start your search with Putnam Diversified Income A (PDINX). PDINX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

PDINX 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.

History of Fund/Manager

Putnam Funds is based in Canton, MA, and is the manager of PDINX. The Putnam Diversified Income A made its debut in October of 1988 and PDINX has managed to accumulate roughly $517.05 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -0.2%, and is 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 -2.36%, which places it in the bottom 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.

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. PDINX's standard deviation over the past three years is 5.1% compared to the category average of 12.86%. Looking at the past 5 years, the fund's standard deviation is 7.84% compared to the category average of 13.89%. This makes the fund less volatile than its peers over the past half-decade.

With a beta of 0.34, this fund is less volatile than a broad market index of fixed income securities. Taking this into account, PDINX has a negative alpha of -0.86, 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, PDINX has 50.04% in high quality bonds rated at least 'AA' or higher, while its junk bond component-bonds rated 'BB' or below-is at 27.46%. This means that the fund has an average quality of A, and focuses on high quality securities.