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Is American Funds Balanced A (ABALX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find an Allocation Balanced fund could think about starting with American Funds Balanced A (ABALX - Free Report) . ABALX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ABALX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
American Funds is responsible for ABALX, and the company is based out of Los Angeles, CA. American Funds Balanced A made its debut in September of 1932, and since then, ABALX has accumulated about $105.84 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 8.82%, and is in the top 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 4.68%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. ABALX's standard deviation over the past three years is 12.05% compared to the category average of 2%. Over the past 5 years, the standard deviation of the fund is 11.65% compared to the category average of 85%. 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 0.63, 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. The fund has produced a negative alpha over the past 5 years of -2.01, which shows 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, ABALX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0%. Looking at the fund from a cost perspective, ABALX is actually more expensive than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Balanced A ( ABALX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Allocation Balanced 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 ABALX to its peers 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 American Funds Balanced A (ABALX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find an Allocation Balanced fund could think about starting with American Funds Balanced A (ABALX - Free Report) . ABALX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
ABALX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
American Funds is responsible for ABALX, and the company is based out of Los Angeles, CA. American Funds Balanced A made its debut in September of 1932, and since then, ABALX has accumulated about $105.84 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 8.82%, and is in the top 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 4.68%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. ABALX's standard deviation over the past three years is 12.05% compared to the category average of 2%. Over the past 5 years, the standard deviation of the fund is 11.65% compared to the category average of 85%. 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 0.63, 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. The fund has produced a negative alpha over the past 5 years of -2.01, which shows 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, ABALX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0%. Looking at the fund from a cost perspective, ABALX is actually more expensive than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Balanced A ( ABALX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, better downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Don't stop here for your research on Allocation Balanced 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 ABALX to its peers 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.