If investors are looking at the Mutual Fund Equity Report fund category, CGM Focus Fund could be a potential option. CGMFX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
CGM is based in Boston, MA, and is the manager of CGMFX. The CGM Focus Fund made its debut in September of 1997 and CGMFX has managed to accumulate roughly $399 million in assets, as of the most recently available information. The fund is currently managed by Ken Heebner who has been in charge of the fund since September of 1997.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.11%, and is in the bottom 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 -1.41%, 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. The standard deviation of CGMFX over the past three years is 27.29% compared to the category average of 19.35%. The fund's standard deviation over the past 5 years is 23.54% compared to the category average of 15.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.94, 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. Over the past 5 years, the fund has a negative alpha of -10.14. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CGMFX is a no load fund. It has an expense ratio of 1.22% compared to the category average of 0.95%. So, CGMFX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, CGM Focus Fund ( CGMFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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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Is CGM Focus Fund (CGMFX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mutual Fund Equity Report fund category, CGM Focus Fund could be a potential option. CGMFX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
CGM is based in Boston, MA, and is the manager of CGMFX. The CGM Focus Fund made its debut in September of 1997 and CGMFX has managed to accumulate roughly $399 million in assets, as of the most recently available information. The fund is currently managed by Ken Heebner who has been in charge of the fund since September of 1997.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 4.11%, and is in the bottom 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 -1.41%, 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. The standard deviation of CGMFX over the past three years is 27.29% compared to the category average of 19.35%. The fund's standard deviation over the past 5 years is 23.54% compared to the category average of 15.72%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.94, 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. Over the past 5 years, the fund has a negative alpha of -10.14. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CGMFX is a no load fund. It has an expense ratio of 1.22% compared to the category average of 0.95%. So, CGMFX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, CGM Focus Fund ( CGMFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.