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Is The Income Fund of America (AMECX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with The Income Fund of America (AMECX - Free Report) . AMECX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for AMECX, and the company is based out of Los Angeles, CA. The Income Fund of America made its debut in December of 1970, and since then, AMECX has accumulated about $78.10 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.98%, and it sits in the top 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 4.72%, 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. AMECX's standard deviation over the past three years is 13.67% compared to the category average of 16.66%. The standard deviation of the fund over the past 5 years is 11.77% compared to the category average of 14.6%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. AMECX has a 5-year beta of 0.6, which means it 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. With a negative alpha of -1.92, 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, AMECX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0.99%. So, AMECX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, The Income Fund of America ( AMECX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on AMECXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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 The Income Fund of America (AMECX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with The Income Fund of America (AMECX - Free Report) . AMECX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is responsible for AMECX, and the company is based out of Los Angeles, CA. The Income Fund of America made its debut in December of 1970, and since then, AMECX has accumulated about $78.10 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.98%, and it sits in the top 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 4.72%, 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. AMECX's standard deviation over the past three years is 13.67% compared to the category average of 16.66%. The standard deviation of the fund over the past 5 years is 11.77% compared to the category average of 14.6%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. AMECX has a 5-year beta of 0.6, which means it 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. With a negative alpha of -1.92, 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, AMECX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0.99%. So, AMECX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, The Income Fund of America ( AMECX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on AMECXin the Mutual Fund Equity Report category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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.