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Is Wells Fargo Premier Large Company Growth A (EKJAX) a Strong Mutual Fund Pick Right Now?
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Large Cap Growth fund seekers should not consider taking a look at Wells Fargo Premier Large Company Growth A (EKJAX - Free Report) at this time. EKJAX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify EKJAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
EKJAX finds itself in the Wells Fargo family, based out of San Francisco, CA. Wells Fargo Premier Large Company Growth A made its debut in February of 1998, and since then, EKJAX has accumulated about $844.97 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 5.96%, and it sits in the middle 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 10.91%, 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. Compared to the category average of 10.71%, the standard deviation of EKJAX over the past three years is 17.11%. The standard deviation of the fund over the past 5 years is 15.96% compared to the category average of 10.54%. 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 EKJAX's case, the fund lost 39.61% in the most recent bear market and outperformed its peer group by 9%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.06, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. EKJAX's 5-year performance has produced a negative alpha of -0.75, which means 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 largely on equities that are traded in the United States.
This fund is currently holding about 83.6% stock in stocks, which have an average market capitalization of $226.35 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
With turnover at about 56.25%, this fund is making fewer trades than the average comparable fund.
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, EKJAX is a load fund. It has an expense ratio of 1.15% compared to the category average of 1.06%. EKJAX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, Wells Fargo Premier Large Company Growth A ( EKJAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, Wells Fargo Premier Large Company Growth A ( EKJAX ) looks like a somewhat weak choice for investors right now.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into EKJAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is Wells Fargo Premier Large Company Growth A (EKJAX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should not consider taking a look at Wells Fargo Premier Large Company Growth A (EKJAX - Free Report) at this time. EKJAX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify EKJAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
EKJAX finds itself in the Wells Fargo family, based out of San Francisco, CA. Wells Fargo Premier Large Company Growth A made its debut in February of 1998, and since then, EKJAX has accumulated about $844.97 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 5.96%, and it sits in the middle 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 10.91%, 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. Compared to the category average of 10.71%, the standard deviation of EKJAX over the past three years is 17.11%. The standard deviation of the fund over the past 5 years is 15.96% compared to the category average of 10.54%. 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 EKJAX's case, the fund lost 39.61% in the most recent bear market and outperformed its peer group by 9%. This might suggest that the fund is a better choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.06, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. EKJAX's 5-year performance has produced a negative alpha of -0.75, which means 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 largely on equities that are traded in the United States.
This fund is currently holding about 83.6% stock in stocks, which have an average market capitalization of $226.35 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
With turnover at about 56.25%, this fund is making fewer trades than the average comparable fund.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, EKJAX is a load fund. It has an expense ratio of 1.15% compared to the category average of 1.06%. EKJAX is actually more expensive than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $100.
Bottom Line
Overall, Wells Fargo Premier Large Company Growth A ( EKJAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and higher fees, Wells Fargo Premier Large Company Growth A ( EKJAX ) looks like a somewhat weak choice for investors right now.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into EKJAX too for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.