Investors seeking opportunities in the Muni - Bonds fund category might find American Century CA High Yield Municipals A (CAYAX) to be a compelling option. With a Zacks Mutual Fund Rank of 1 (Strong Buy), it stands out based on factors such as size, cost, and past performance. CAYAX is just one among the numerous Muni - Bonds funds available. These funds invest in debt securities issued by states and local municipalities, which are commonly used for infrastructure construction, schools, and other government-related purposes. Some securities are backed by taxes (revenue bonds), while others are known as "general obligation" and may not have a specific backing. The inherent tax benefits make these bonds highly attractive.

American Century Family and Fund History

CAYAX belongs to the American Century family based in Kansas City, MO. It made its debut in January 2003 and has accumulated approximately $48.13 million in assets as of the latest available date. The fund is currently managed by Joseph Gotelli, who has been in charge since January 2012. This long history and experienced management add to the fund's credibility.When it comes to performance, this fund shows interesting characteristics. It has a 5 - year annualized total return of 0.81% and is positioned in the middle third among its category peers. For shorter time frames, the 3 - year annualized total return of -0.9% also places it in the middle third. It's important to note that the product's returns may not fully reflect all expenses. Any unaccounted fees would lower the returns. Additionally, total returns do not include the fund's [%] sale charge. If sales charges were included, total returns would be lower.Looking at the standard deviation of returns is crucial. A lower standard deviation indicates less volatility. Over the past three years, CAYAX has a standard deviation of 9.11% compared to the category average of 13.19%. Over the past 5 years, the standard deviation is 8.41% compared to the category average of 13.67%. This makes CAYAX less volatile than its peers over the past half - decade.CAYAX also has a beta of 0.91, meaning it is less volatile than a broad market index of fixed income securities. With a positive alpha of 0.21, it performs well on a risk - adjusted basis.In terms of bond ratings, CAYAX has 22.8% in high quality bonds rated at least "AA" or higher and 22.95% in medium quality bonds with ratings of "A" to "BBB". The fund has an average quality of BBB and focuses on medium quality securities. However, it's worth noting that 48% of the bonds in this fund are not ranked, so one should approach the average quality level with some caution.

Cost Considerations

Costs play a significant role in mutual fund investing, especially in a competitive market. All else being equal, a lower cost product tends to outperform its identical counterpart. CAYAX is a load fund with an expense ratio of 0.75% compared to the category average of 0.90%. From a cost perspective, CAYAX is actually cheaper than its peers. It's essential for investors to be aware of these cost differences.Investors should also note that the minimum initial investment for the product is $2,500, and each subsequent investment needs to be at $50. Additionally, fees charged by investment advisors have not been considered. If these were included, returns would be lower.Overall, with a high Zacks Mutual Fund rank, comparable performance, better downside risk, and lower fees, American Century CA High Yield Municipals A (CAYAX) appears to be a good potential choice for investors at present.Your research on the Muni - Bonds segment doesn't have to end here. You can explore all the excellent mutual fund tools offered at www.zacks.com/funds/mutual - funds to obtain additional features and information. Whether you're a novice or an experienced investor, we have a full suite of tools on stocks to help you find the best choices for your portfolio.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report.Get Your Free (CAYAX): Fund Analysis Report.To read this article on Zacks.com click here.Zacks Investment Research.