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Is Invesco Diversified Dividend A (LCEAX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Large Cap Blend fund category, make sure to pass over Invesco Diversified Dividend A (LCEAX - Free Report) . LCEAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that LCEAX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Invesco is based in Kansas City, MO, and is the manager of LCEAX. Invesco Diversified Dividend A made its debut in December of 2001, and since then, LCEAX has accumulated about $5.27 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. LCEAX has a 5-year annualized total return of 7.4% and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 5.79%, 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 8.97%, the standard deviation of LCEAX over the past three years is 6.98%. The standard deviation of the fund over the past 5 years is 7.64% compared to the category average of 8.75%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In LCEAX's case, the fund lost 44.52% in the most recent bear market and underperformed comparable funds by 5.16%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.67, so it is likely going to be less volatile than 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. The fund has produced a negative alpha over the past 5 years of -0.28, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, LCEAX is a load fund. It has an expense ratio of 0.80% compared to the category average of 1%. So, LCEAX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, Invesco Diversified Dividend A ( LCEAX ) 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.
Want even more information about LCEAX? 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Invesco Diversified Dividend A (LCEAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Large Cap Blend fund category, make sure to pass over Invesco Diversified Dividend A (LCEAX - Free Report) . LCEAX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that LCEAX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Invesco is based in Kansas City, MO, and is the manager of LCEAX. Invesco Diversified Dividend A made its debut in December of 2001, and since then, LCEAX has accumulated about $5.27 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. LCEAX has a 5-year annualized total return of 7.4% and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 5.79%, 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 8.97%, the standard deviation of LCEAX over the past three years is 6.98%. The standard deviation of the fund over the past 5 years is 7.64% compared to the category average of 8.75%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In LCEAX's case, the fund lost 44.52% in the most recent bear market and underperformed comparable funds by 5.16%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.67, so it is likely going to be less volatile than 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. The fund has produced a negative alpha over the past 5 years of -0.28, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, LCEAX is a load fund. It has an expense ratio of 0.80% compared to the category average of 1%. So, LCEAX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, Invesco Diversified Dividend A ( LCEAX ) 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.
Want even more information about LCEAX? 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.