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Is American Funds Cap Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Mutual Fund Equity Report fund might consider looking past American Funds Cap Income Builder A (CAIBX - Free Report) . CAIBX possesses 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 Funds is based in Los Angeles, CA, and is the manager of CAIBX. Since American Funds Cap Income Builder A made its debut in July of 1987, CAIBX has garnered more than $67.63 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 6.7%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.29%, which places it in the middle 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. CAIBX's standard deviation over the past three years is 11.57% compared to the category average of 14.43%. Over the past 5 years, the standard deviation of the fund is 9.97% compared to the category average of 12.77%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.58, the fund is likely to be less volatile than the market average. 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. CAIBX's 5-year performance has produced a negative alpha of -2.3, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CAIBX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.92%. So, CAIBX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Cap Income Builder A ( CAIBX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Funds Cap Income Builder A ( CAIBX ) looks like a somewhat weak choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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 Cap Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mutual Fund Equity Report fund might consider looking past American Funds Cap Income Builder A (CAIBX - Free Report) . CAIBX possesses 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 Funds is based in Los Angeles, CA, and is the manager of CAIBX. Since American Funds Cap Income Builder A made its debut in July of 1987, CAIBX has garnered more than $67.63 billion in assets. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 6.7%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.29%, which places it in the middle 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. CAIBX's standard deviation over the past three years is 11.57% compared to the category average of 14.43%. Over the past 5 years, the standard deviation of the fund is 9.97% compared to the category average of 12.77%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.58, the fund is likely to be less volatile than the market average. 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. CAIBX's 5-year performance has produced a negative alpha of -2.3, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CAIBX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.92%. So, CAIBX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Cap Income Builder A ( CAIBX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Funds Cap Income Builder A ( CAIBX ) looks like a somewhat weak choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.