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Is Invesco American Franchise A (VAFAX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Mutual Fund Equity Report funds, you might want to consider passing on by Invesco American Franchise A (VAFAX - Free Report) as a possibility. VAFAX 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
Invesco is based in Kansas City, MO, and is the manager of VAFAX. Invesco American Franchise A made its debut in June of 2005, and since then, VAFAX has accumulated about $11.36 billion in assets, per the most up-to-date date available. The fund is currently managed by Ido Cohen who has been in charge of the fund since June of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.22%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 11.08%, 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. Compared to the category average of 16.31%, the standard deviation of VAFAX over the past three years is 21.34%. The fund's standard deviation over the past 5 years is 19.82% compared to the category average of 14.62%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.07, the fund is likely to be more 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. VAFAX's 5-year performance has produced a negative alpha of -1.87, 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 largely on equities that are traded in the United States.
The mutual fund currently has 94.28% of its holdings in stocks, which have an average market capitalization of $538.83 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Turnover is about 72%, so those in charge of the fund make more trades per year than the comparable average.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VAFAX is a load fund. It has an expense ratio of 0.93% compared to the category average of 0.99%. From a cost perspective, VAFAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Invesco American Franchise A ( VAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, Invesco American Franchise A ( VAFAX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VAFAX to its peers as well 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.
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Is Invesco American Franchise A (VAFAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Mutual Fund Equity Report funds, you might want to consider passing on by Invesco American Franchise A (VAFAX - Free Report) as a possibility. VAFAX 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
Invesco is based in Kansas City, MO, and is the manager of VAFAX. Invesco American Franchise A made its debut in June of 2005, and since then, VAFAX has accumulated about $11.36 billion in assets, per the most up-to-date date available. The fund is currently managed by Ido Cohen who has been in charge of the fund since June of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 11.22%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 11.08%, 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. Compared to the category average of 16.31%, the standard deviation of VAFAX over the past three years is 21.34%. The fund's standard deviation over the past 5 years is 19.82% compared to the category average of 14.62%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.07, the fund is likely to be more 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. VAFAX's 5-year performance has produced a negative alpha of -1.87, 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 largely on equities that are traded in the United States.
The mutual fund currently has 94.28% of its holdings in stocks, which have an average market capitalization of $538.83 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
Turnover is about 72%, so those in charge of the fund make more trades per year than the comparable average.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, VAFAX is a load fund. It has an expense ratio of 0.93% compared to the category average of 0.99%. From a cost perspective, VAFAX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Invesco American Franchise A ( VAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, Invesco American Franchise A ( VAFAX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare VAFAX to its peers as well 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.