Back to top

Image: Bigstock

Is Virtus Duff & Phelps Water A (AWTAX) a Strong Mutual Fund Pick Right Now?

Read MoreHide Full Article

On the lookout for a Sector - Utilities fund? Starting with Virtus Duff & Phelps Water A (AWTAX - Free Report) should not be a possibility at this time. AWTAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

AWTAX is classified in the Sector - Utilities segment by Zacks, an area full of potential. Sector - Utilities mutual funds focus on companies that provide essential servicessuch as electric power, gas distribution, and water supplyto millions of people on a daily basis. Overall, the utility industry is known for its stability and reduced volatility.

History of Fund/Manager

AWTAX is a part of the Virtus Funds family of funds, a company based out of Hartford, CT. Since Virtus Duff & Phelps Water A made its debut in April of 2008, AWTAX has garnered more than $207.38 million in assets. The fund's current manager, DAVID Grumhaus, has been in charge of the fund since July of 2022.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 9.84%, and it sits 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 8.67%, 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. Compared to the category average of 16.29%, the standard deviation of AWTAX over the past three years is 18.77%. Over the past 5 years, the standard deviation of the fund is 17.85% compared to the category average of 16.05%. 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 0.95, which means it is hypothetically 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. Over the past 5 years, the fund has a negative alpha of -4.42. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, AWTAX is a load fund. It has an expense ratio of 1.22% compared to the category average of 1.01%. Looking at the fund from a cost perspective, AWTAX is actually more expensive than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.

Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.

Bottom Line

Overall, Virtus Duff & Phelps Water A ( AWTAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, Virtus Duff & Phelps Water A ( AWTAX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Sector - Utilities 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 AWTAX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


VIRTUS DUFF&PHELPS WATER A (AWTAX) - free report >>

Published in