Mutual Fund Equity Report fund seekers should not consider taking a look at American Century Equity Income Investor (TWEIX Quick QuoteTWEIX - Free Report) at this time. TWEIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Century is based in Kansas City, MO, and is the manager of TWEIX. American Century Equity Income Investor debuted in August of 1994. Since then, TWEIX has accumulated assets of about $4.11 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. TWEIX has a 5-year annualized total return of 8.38% and it sits 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 9.68%, 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. Over the past three years, TWEIX's standard deviation comes in at 14.79%, compared to the category average of 15.03%. The fund's standard deviation over the past 5 years is 12.88% compared to the category average of 13.31%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 0.77, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. TWEIX's 5-year performance has produced a negative alpha of -3.09, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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 principally on equities that are traded in the United States.

The mutual fund currently has 83.7% of its holdings in stocks, with an average market capitalization of $300.61 billion. The fund has the heaviest exposure to the following market sectors:

1. Finance
2. Technology

This fund's turnover is about 52%, so the fund managers are making 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, TWEIX is a no load fund. It has an expense ratio of 0.90% compared to the category average of 1%. Looking at the fund from a cost perspective, TWEIX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $50.

Bottom Line

Overall, American Century Equity Income Investor ( TWEIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Century Equity Income Investor ( TWEIX ) looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.