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Is Columbia Disciplined Core A (AQEAX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that may not be worth investigating is Columbia Disciplined Core A (AQEAX - Free Report) . AQEAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that AQEAX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a 'buy and hold' mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Columbia is based in Kansas City, MO, and is the manager of AQEAX. The Columbia Disciplined Core A made its debut in December of 2004 and AQEAX has managed to accumulate roughly $4.43 billion in assets, as of the most recently available information. The fund's current manager, Raghavendran Sivaraman, has been in charge of the fund since December of 2019.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 13.8%, and is in the middle 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 17.76%, which places it in the middle 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. AQEAX's standard deviation over the past three years is 15.48% compared to the category average of 14.41%. The standard deviation of the fund over the past 5 years is 16.24% compared to the category average of 13.95%. 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 1, so it is likely going to be as volatile as 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 -0.79. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
As of the last filing date, the mutual fund has 83.56% of its assets in stocks, with an average market capitalization of $377.67 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Turnover is 44%, which means, on average, the fund makes more trades per year than the comparable average.
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, AQEAX is a load fund. It has an expense ratio of 0.94% compared to the category average of 0.90%. So, AQEAX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Columbia Disciplined Core A ( AQEAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, Columbia Disciplined Core A ( AQEAX ) looks like a somewhat weak choice for investors right now.
Your research on the Large Cap Blend 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. 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 Columbia Disciplined Core A (AQEAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that may not be worth investigating is Columbia Disciplined Core A (AQEAX - Free Report) . AQEAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that AQEAX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a 'buy and hold' mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
Columbia is based in Kansas City, MO, and is the manager of AQEAX. The Columbia Disciplined Core A made its debut in December of 2004 and AQEAX has managed to accumulate roughly $4.43 billion in assets, as of the most recently available information. The fund's current manager, Raghavendran Sivaraman, has been in charge of the fund since December of 2019.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 13.8%, and is in the middle 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 17.76%, which places it in the middle 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. AQEAX's standard deviation over the past three years is 15.48% compared to the category average of 14.41%. The standard deviation of the fund over the past 5 years is 16.24% compared to the category average of 13.95%. 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 1, so it is likely going to be as volatile as 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 -0.79. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
As of the last filing date, the mutual fund has 83.56% of its assets in stocks, with an average market capitalization of $377.67 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 44%, which means, on average, the fund makes more trades per year than the comparable average.
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, AQEAX is a load fund. It has an expense ratio of 0.94% compared to the category average of 0.90%. So, AQEAX is actually more expensive than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $2,000 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, Columbia Disciplined Core A ( AQEAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, Columbia Disciplined Core A ( AQEAX ) looks like a somewhat weak choice for investors right now.
Your research on the Large Cap Blend 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. 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.