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Is Prudential Financial Services A (PFSAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Sector - Finance fund? Well, Prudential Financial Services A (PFSAX - Free Report) would not be a good potential starting point right now. PFSAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PFSAX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.
History of Fund/Manager
Prudential is based in Providence, RI, and is the manager of PFSAX. Since Prudential Financial Services A made its debut in June of 1999, PFSAX has garnered more than $77.02 million in assets. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of -1.78%, and is in the top 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 2.99%, 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 10.65%, the standard deviation of PFSAX over the past three years is 16.13%. Looking at the past 5 years, the fund's standard deviation is 15.78% compared to the category average of 10.29%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PFSAX's case, the fund lost 47.09% in the most recent bear market and outperformed its peer group by 14.41%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PFSAX has a 5-year beta of 1.15, which means it is likely to be more volatile than 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. With a negative alpha of -10.05, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 80.72% of its holdings in stocks, and these companies have an average market capitalization of $96.89 billion. Turnover is 26%, which means this fund makes fewer trades than its comparable peers.
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, PFSAX is a load fund. It has an expense ratio of 1.33% compared to the category average of 1.42%. Looking at the fund from a cost perspective, PFSAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Bottom Line
Overall, Prudential Financial Services A ( PFSAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Sector - Finance 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 PFSAX to its peers as well 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 Prudential Financial Services A (PFSAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Finance fund? Well, Prudential Financial Services A (PFSAX - Free Report) would not be a good potential starting point right now. PFSAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
PFSAX is one of many Sector - Finance funds to choose from. Sector - Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.
History of Fund/Manager
Prudential is based in Providence, RI, and is the manager of PFSAX. Since Prudential Financial Services A made its debut in June of 1999, PFSAX has garnered more than $77.02 million in assets. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of -1.78%, and is in the top 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 2.99%, 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 10.65%, the standard deviation of PFSAX over the past three years is 16.13%. Looking at the past 5 years, the fund's standard deviation is 15.78% compared to the category average of 10.29%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In PFSAX's case, the fund lost 47.09% in the most recent bear market and outperformed its peer group by 14.41%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PFSAX has a 5-year beta of 1.15, which means it is likely to be more volatile than 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. With a negative alpha of -10.05, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 80.72% of its holdings in stocks, and these companies have an average market capitalization of $96.89 billion. Turnover is 26%, which means this fund makes fewer trades than its comparable peers.
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, PFSAX is a load fund. It has an expense ratio of 1.33% compared to the category average of 1.42%. Looking at the fund from a cost perspective, PFSAX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Bottom Line
Overall, Prudential Financial Services A ( PFSAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Sector - Finance 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 PFSAX to its peers as well 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.