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Is CGM Focus Fund (CGMFX) a Strong Mutual Fund Pick Right Now?

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Having trouble finding a Mutual Fund Equity Report fund? Well, CGM Focus Fund (CGMFX - Free Report) would not be a good potential starting point right now. CGMFX has a Zacks Mutual Fund Rank of 5 (Strong Sell), 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. CGM Focus Fund debuted in September of 1997. Since then, CGMFX has accumulated assets of about $386.07 million, according to the most recently available information. The fund's current manager, Ken Heebner, has been in charge of the fund since September of 1997.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -0.33%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 7.22%, 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. Compared to the category average of 18.92%, the standard deviation of CGMFX over the past three years is 25.84%. Over the past 5 years, the standard deviation of the fund is 23.2% compared to the category average of 16.72%. 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 0.86, so it is likely going to be less volatile than the market at large. 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. CGMFX's 5-year performance has produced a negative alpha of -9.42, which means managers in this portfolio find it difficult to pick 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, CGMFX is a no load fund. It has an expense ratio of 1.20% compared to the category average of 0.92%. So, CGMFX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.

Bottom Line

Overall, CGM Focus Fund ( CGMFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Mutual Fund Equity Report 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 CGMFX to its peers as well 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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