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Is Templeton Developing Markets A (TEDMX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Non US - Equity fund category, Templeton Developing Markets A (TEDMX - Free Report) could be a potential option. TEDMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes TEDMX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
Franklin Templeton is based in Lauderdale, FL, and is the manager of TEDMX. Templeton Developing Markets A debuted in October of 1991. Since then, TEDMX has accumulated assets of about $1.21 billion, according to the most recently available information. The fund's current manager, Chetan Sehgal, has been in charge of the fund since April of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. TEDMX has a 5-year annualized total return of 4.1% 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 11.65%, 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. Over the past three years, TEDMX's standard deviation comes in at 15.45%, compared to the category average of 14.88%. The standard deviation of the fund over the past 5 years is 14.5% compared to the category average of 14.17%. 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. TEDMX lost 63.04% in the most recent bear market and underperformed its peer group by 4.66%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.99, the fund is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -9.65. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, TEDMX is a load fund. It has an expense ratio of 1.39% compared to the category average of 1.40%. So, TEDMX is actually less expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Templeton Developing Markets A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance and average downside risk this fund looks like a good potential choice for investors right now.
Want even more information about TEDMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.
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Is Templeton Developing Markets A (TEDMX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Non US - Equity fund category, Templeton Developing Markets A (TEDMX - Free Report) could be a potential option. TEDMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes TEDMX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.
History of Fund/Manager
Franklin Templeton is based in Lauderdale, FL, and is the manager of TEDMX. Templeton Developing Markets A debuted in October of 1991. Since then, TEDMX has accumulated assets of about $1.21 billion, according to the most recently available information. The fund's current manager, Chetan Sehgal, has been in charge of the fund since April of 2017.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. TEDMX has a 5-year annualized total return of 4.1% 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 11.65%, 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. Over the past three years, TEDMX's standard deviation comes in at 15.45%, compared to the category average of 14.88%. The standard deviation of the fund over the past 5 years is 14.5% compared to the category average of 14.17%. 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. TEDMX lost 63.04% in the most recent bear market and underperformed its peer group by 4.66%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 0.99, the fund is likely to be as volatile as 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. Over the past 5 years, the fund has a negative alpha of -9.65. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, TEDMX is a load fund. It has an expense ratio of 1.39% compared to the category average of 1.40%. So, TEDMX is actually less expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Templeton Developing Markets A has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance and average downside risk this fund looks like a good potential choice for investors right now.
Want even more information about TEDMX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.