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Is Loomis Sayles Growth Fund A (LGRRX) 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 Loomis Sayles Growth Fund A (LGRRX - Free Report) as a possibility. LGRRX 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

Natixis Funds is based in Kansas City, MO, and is the manager of LGRRX. The Loomis Sayles Growth Fund A made its debut in May of 1991 and LGRRX has managed to accumulate roughly $1.40 billion in assets, as of the most recently available information. Aziz Hamzaogullari is the fund's current manager and has held that role since May of 2010.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. LGRRX has a 5-year annualized total return of 11.35% 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 9.42%, 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. Compared to the category average of 16.82%, the standard deviation of LGRRX over the past three years is 19.74%. Over the past 5 years, the standard deviation of the fund is 18.28% compared to the category average of 15.1%. 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 1, so it is likely going to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -1.14. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

Currently, this mutual fund is holding 97.03% stock in stocks, with an average market capitalization of $513.45 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Retail Trade
Turnover is 28%, which means, on average, the fund makes fewer trades than comparable funds.

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, LGRRX is a load fund. It has an expense ratio of 0.89% compared to the category average of 0.99%. Looking at the fund from a cost perspective, LGRRX 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, Loomis Sayles Growth Fund A ( LGRRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund 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 LGRRX to its peers as well 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.


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