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Is AQR Large Cap Defensive Style I (AUEIX) 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 AQR Large Cap Defensive Style I (AUEIX - Free Report) . AUEIX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

AUEIX 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

AUEIX finds itself in the AQR Funds family, based out of Denver, CO. The AQR Large Cap Defensive Style I made its debut in July of 2012 and AUEIX has managed to accumulate roughly $4.25 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. This fund has delivered a 5-year annualized total return of 14.76%, and it sits 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 13.22%, 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. AUEIX's standard deviation over the past three years is 16.18% compared to the category average of 16.4%. The fund's standard deviation over the past 5 years is 13.2% compared to the category average of 13.78%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.84, so it is likely going to be 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 positive alpha over the past 5 years of 1.65, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, AUEIX is a no load fund. It has an expense ratio of 0.40% compared to the category average of 0.97%. From a cost perspective, AUEIX is actually cheaper than its peers.

While the minimum initial investment for the product is $5 million, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, AQR Large Cap Defensive Style I ( AUEIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, AQR Large Cap Defensive Style I ( AUEIX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Large Cap Blend 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 AUEIX to its peers as well 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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