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Is Columbia Large Cap Enhanced Core A (NMIAX) a Strong Mutual Fund Pick Right Now?

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Any investors hoping to find a Large Cap Blend fund could think about starting with Columbia Large Cap Enhanced Core A (NMIAX - Free Report) . NMIAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

NMIAX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.

History of Fund/Manager

Columbia is based in Boston, MA, and is the manager of NMIAX. Columbia Large Cap Enhanced Core A made its debut in July of 1996, and since then, NMIAX has accumulated about $78.98 million in assets, per the most up-to-date date available. Brian M. Condon is the fund's current manager and has held that role since February of 2009.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. NMIAX has a 5-year annualized total return of 10.97% and is 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 14.49%, 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, NMIAX's standard deviation comes in at 10.91%, compared to the category average of 9.25%. The standard deviation of the fund over the past 5 years is 11.47% compared to the category average of 9.63%. 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 NMIAX's case, the fund lost 50.89% in the most recent bear market and underperformed its peer group by 1.52%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Nevertheless, with a 5-year beta of 1.01, 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. With a negative alpha of -0.67, 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 mostly on equities that are traded in the United States.

This fund is currently holding about 94.1% stock in stocks, with an average market capitalization of $209.29 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Finance
Turnover is 99%, which means, on average, the fund makes more trades per year than the comparable average.

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, NMIAX is a no load fund. It has an expense ratio of 0.89% compared to the category average of 0.96%. From a cost perspective, NMIAX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment has no minimum amount.

Bottom Line

Overall, Columbia Large Cap Enhanced Core A ( NMIAX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

Want even more information about NMIAX? 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 are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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