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Is American Funds Washington Mutual Investors A (AWSHX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Value funds, consider American Funds Washington Mutual Investors A (AWSHX - Free Report) as a possibility. AWSHX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
AWSHX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. The American Funds Washington Mutual Investors A made its debut in July of 1952 and AWSHX has managed to accumulate roughly $71.47 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. AWSHX has a 5-year annualized total return of 14.15% and it sits 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 13.61%, 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. AWSHX's standard deviation over the past three years is 17.07% compared to the category average of 15.26%. Looking at the past 5 years, the fund's standard deviation is 13.92% compared to the category average of 12.58%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.9, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -1.35, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 75.94% stock in stocks, with an average market capitalization of $284.52 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
With turnover at about 24%, this fund makes fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, AWSHX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.95%. Looking at the fund from a cost perspective, AWSHX is actually cheaper than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Washington Mutual Investors A ( AWSHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Funds Washington Mutual Investors A ( AWSHX ) looks like a great potential choice for investors right now.
This could just be the start of your research on AWSHXin the Large Cap Value 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is American Funds Washington Mutual Investors A (AWSHX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Value funds, consider American Funds Washington Mutual Investors A (AWSHX - Free Report) as a possibility. AWSHX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
AWSHX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. The American Funds Washington Mutual Investors A made its debut in July of 1952 and AWSHX has managed to accumulate roughly $71.47 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. AWSHX has a 5-year annualized total return of 14.15% and it sits 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 13.61%, 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. AWSHX's standard deviation over the past three years is 17.07% compared to the category average of 15.26%. Looking at the past 5 years, the fund's standard deviation is 13.92% compared to the category average of 12.58%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.9, so it is likely going to be less volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -1.35, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 75.94% stock in stocks, with an average market capitalization of $284.52 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Industrial Cyclical
With turnover at about 24%, this fund makes fewer trades than the average comparable fund.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, AWSHX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.95%. Looking at the fund from a cost perspective, AWSHX is actually cheaper than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Washington Mutual Investors A ( AWSHX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Funds Washington Mutual Investors A ( AWSHX ) looks like a great potential choice for investors right now.
This could just be the start of your research on AWSHXin the Large Cap Value 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.