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Is American Funds Washington Mutual Investors A (AWSHX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Large Cap Value funds, consider American Funds Washington Mutual Investors A (AWSHX - Free Report) as a possibility. AWSHX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
AWSHX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of AWSHX. The American Funds Washington Mutual Investors A made its debut in July of 1952 and AWSHX has managed to accumulate roughly $56.05 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. AWSHX has a 5-year annualized total return of 11.69% 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 12.18%, 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. Compared to the category average of 8.83%, the standard deviation of AWSHX over the past three years is 9.81%. Looking at the past 5 years, the fund's standard deviation is 9.36% compared to the category average of 8.61%. 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. AWSHX lost 48.94% in the most recent bear market and underperformed comparable funds by 1.37%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.95, which means it is hypothetically less volatile than 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 negative alpha over the past 5 years of -0.65, which shows that managers in this portfolio find it difficult to pick 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.
Currently, this mutual fund is holding 97.18% stock in stocks, which have an average market capitalization of $181.98 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Other
With turnover at about 25%, this fund is making fewer trades than comparable funds.
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, AWSHX is a load fund. It has an expense ratio of 0.57% compared to the category average of 1.03%. From a cost perspective, AWSHX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Washington Mutual Investors A 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.
Don't stop here for your research on Large Cap Value 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 AWSHX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is American Funds Washington Mutual Investors A (AWSHX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Large Cap Value funds, consider American Funds Washington Mutual Investors A (AWSHX - Free Report) as a possibility. AWSHX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
AWSHX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of AWSHX. The American Funds Washington Mutual Investors A made its debut in July of 1952 and AWSHX has managed to accumulate roughly $56.05 billion in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. AWSHX has a 5-year annualized total return of 11.69% 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 12.18%, 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. Compared to the category average of 8.83%, the standard deviation of AWSHX over the past three years is 9.81%. Looking at the past 5 years, the fund's standard deviation is 9.36% compared to the category average of 8.61%. 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. AWSHX lost 48.94% in the most recent bear market and underperformed comparable funds by 1.37%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.95, which means it is hypothetically less volatile than 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 negative alpha over the past 5 years of -0.65, which shows that managers in this portfolio find it difficult to pick 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.
Currently, this mutual fund is holding 97.18% stock in stocks, which have an average market capitalization of $181.98 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 25%, this fund is making fewer trades than comparable funds.
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, AWSHX is a load fund. It has an expense ratio of 0.57% compared to the category average of 1.03%. From a cost perspective, AWSHX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Washington Mutual Investors A 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.
Don't stop here for your research on Large Cap Value 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 AWSHX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.