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Is American Funds Fundamental Investors A (ANCFX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Large Cap Blend fund? American Funds Fundamental Investors A (ANCFX - Free Report) is a possible starting point. ANCFX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ANCFX 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
American Funds is based in Los Angeles, CA, and is the manager of ANCFX. The American Funds Fundamental Investors A made its debut in July of 1978 and ANCFX has managed to accumulate roughly $60.57 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 13.84%, and is in the bottom 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 13.55%, 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. Over the past three years, ANCFX's standard deviation comes in at 18.14%, compared to the category average of 15.14%. Looking at the past 5 years, the fund's standard deviation is 14.81% compared to the category average of 12.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.97, the fund is likely to be as volatile as the market average. 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. The fund has produced a negative alpha over the past 5 years of -1.65, which shows that 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.
Right now, 79.95% of this mutual fund's holdings are stocks and it has 17.38% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
Technology
Non-Durable
Finance
Industrial Cyclical
With turnover at about 48%, this fund makes fewer trades than its comparable peers.
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, ANCFX is a load fund. It has an expense ratio of 0.61% compared to the category average of 0.96%. From a cost perspective, ANCFX is actually cheaper than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Fundamental Investors A ( ANCFX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Want even more information about ANCFX? 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is American Funds Fundamental Investors A (ANCFX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Blend fund? American Funds Fundamental Investors A (ANCFX - Free Report) is a possible starting point. ANCFX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ANCFX 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
American Funds is based in Los Angeles, CA, and is the manager of ANCFX. The American Funds Fundamental Investors A made its debut in July of 1978 and ANCFX has managed to accumulate roughly $60.57 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 13.84%, and is in the bottom 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 13.55%, 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. Over the past three years, ANCFX's standard deviation comes in at 18.14%, compared to the category average of 15.14%. Looking at the past 5 years, the fund's standard deviation is 14.81% compared to the category average of 12.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.97, the fund is likely to be as volatile as the market average. 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. The fund has produced a negative alpha over the past 5 years of -1.65, which shows that 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.
Right now, 79.95% of this mutual fund's holdings are stocks and it has 17.38% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
- Technology
- Non-Durable
- Finance
- Industrial Cyclical
With turnover at about 48%, this fund makes fewer trades than its comparable peers.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, ANCFX is a load fund. It has an expense ratio of 0.61% compared to the category average of 0.96%. From a cost perspective, ANCFX is actually cheaper than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Fundamental Investors A ( ANCFX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.
Want even more information about ANCFX? 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.