Back to top

Image: Bigstock

Is Dodge & Cox Balanced Fund (DODBX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

Any investors hoping to find a Mutual Fund Equity Report fund might consider looking past Dodge & Cox Balanced Fund (DODBX - Free Report) . DODBX 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

Dodge & Cox is responsible for DODBX, and the company is based out of Boston, MA. Since Dodge & Cox Balanced Fund made its debut in December of 1967, DODBX has garnered more than $15.51 billion in assets. 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. This fund in particular has delivered a 5-year annualized total return of 9.46%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 12.33%, which places it in the top 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. The standard deviation of DODBX over the past three years is 15.62% compared to the category average of 12.13%. Over the past 5 years, the standard deviation of the fund is 13.24% compared to the category average of 10.75%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.76, so investors should note that it is hypothetically 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 -2.05, 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 largely on equities that are traded in the United States.

Right now, 84.51% of this mutual fund's holdings are stocks, with an average market capitalization of $226.92 billion. The fund has the heaviest exposure to the following market sectors:

  1. Other
  2. Finance
  3. Technology
With turnover at about 58%, this fund is 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, DODBX is a no load fund. It has an expense ratio of 0.53% compared to the category average of 0.86%. Looking at the fund from a cost perspective, DODBX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, Dodge & Cox Balanced Fund ( DODBX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Dodge & Cox Balanced Fund ( DODBX ) looks like a somewhat weak choice for investors right now.

For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DODBX too for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Dodge & Cox Balanced I (DODBX) - free report >>

Published in