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Is Loomis Sayles Growth Fund A (LGRRX) a Strong Mutual Fund Pick Right Now? (Revised)
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On the lookout for a Large Cap Growth fund? Starting with Loomis Sayles Growth Fund A (LGRRX - Free Report) is one possibility. LGRRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LGRRX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Loomis, Sayles & Company, the fund's manager, is based in Boston, MA and has $261.3 billion in assets under management. The Loomis Sayles Growth Fund made its debut in May of 1991 under a different portfolio management team. Aziz V. Hamzaogullari took over the fund in 2010. The fund currently has $7.8 billion in net assets, as of November 30, 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 18.66%, 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 15.28%, 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. Over the past three years, LGRRX's standard deviation comes in at 11.98%, compared to the category average of 9.37%. Looking at the past 5 years, the fund's standard deviation is 10.99% compared to the category average of 10.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, LGRRX lost 54.96% and underperformed comparable funds by 6.08%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 50.06% in what was its worst calendar year in a decade.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as the market at large. 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. The fund has produced a positive alpha over the past 5 years of 2.78, which shows that managers in this portfolio are skilled in picking 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 primarily on equities that are traded in the United States.
This fund is currently holding about 98.69% stock in stocks, which have an average market capitalization of $215.29 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Non-Durable
With turnover at about 14%, this fund makes 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, LGRRX is a load fund. It has an expense ratio of 0.92% compared to the category average of 1.14%. Looking at the fund from a cost perspective, LGRRX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Loomis Sayles Growth Fund A LGRRX 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.
Your research on the Large Cap Growth 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
(We are reissuing this article to correct a mistake. The original article, issued on Dec 28, 2017, should no longer be relied upon.)
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Is Loomis Sayles Growth Fund A (LGRRX) a Strong Mutual Fund Pick Right Now? (Revised)
On the lookout for a Large Cap Growth fund? Starting with Loomis Sayles Growth Fund A (LGRRX - Free Report) is one possibility. LGRRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LGRRX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Loomis, Sayles & Company, the fund's manager, is based in Boston, MA and has $261.3 billion in assets under management. The Loomis Sayles Growth Fund made its debut in May of 1991 under a different portfolio management team. Aziz V. Hamzaogullari took over the fund in 2010. The fund currently has $7.8 billion in net assets, as of November 30, 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 18.66%, 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 15.28%, 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. Over the past three years, LGRRX's standard deviation comes in at 11.98%, compared to the category average of 9.37%. Looking at the past 5 years, the fund's standard deviation is 10.99% compared to the category average of 10.91%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, LGRRX lost 54.96% and underperformed comparable funds by 6.08%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
And for investors concerned about the potential drawdown in a really bad calendar year, we can look back to 2008 for that figure. The fund lost over 50.06% in what was its worst calendar year in a decade.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.03, which means it is hypothetically as volatile as the market at large. 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. The fund has produced a positive alpha over the past 5 years of 2.78, which shows that managers in this portfolio are skilled in picking 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 primarily on equities that are traded in the United States.
This fund is currently holding about 98.69% stock in stocks, which have an average market capitalization of $215.29 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 14%, this fund makes 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, LGRRX is a load fund. It has an expense ratio of 0.92% compared to the category average of 1.14%. Looking at the fund from a cost perspective, LGRRX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Bottom Line
Overall, Loomis Sayles Growth Fund A LGRRX 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.
Your research on the Large Cap Growth 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
(We are reissuing this article to correct a mistake. The original article, issued on Dec 28, 2017, should no longer be relied upon.)