If you've been stuck searching for Sector - Real Estate funds, consider CGM Realty Fund (CGMRX - Free Report) as a possibility. CGMRX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
CGMRX is one of many Sector - Real Estate funds to choose from. Sector - Real Estate mutual funds are known to invest in real estate investment trusts (REITs). A popular income vehicle thanks to its taxation rules, a REIT is required to pay out at least 90% of its income annually to avoid double taxation. This technique makes securities in these funds high dividend players, and even bond-like in some instances, though their risk is similar to equities.
History of Fund/Manager
CGMRX finds itself in the CGM family, based out of Boston, MA. CGM Realty Fund made its debut in May of 1994, and since then, CGMRX has accumulated about $896.94 million in assets, per the most up-to-date date available. The fund is currently managed by Ken Heebner who has been in charge of the fund since May of 1994.
Investors naturally seek funds with strong performance. CGMRX has a 5-year annualized total return of 10.84% and it sits in the top 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 8.41%, which places it in the top 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. CGMRX's standard deviation over the past three years is 15.48% compared to the category average of 11.71%. Over the past 5 years, the standard deviation of the fund is 14.73% compared to the category average of 12.29%. This makes the fund more volatile than its peers over the past half-decade.
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In CGMRX's case, the fund lost 64.01% in the most recent bear market and underperformed comparable funds by 0.01%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.15, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. CGMRX's 5-year performance has produced a negative alpha of -5.29, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 principally on equities that are traded in the United States.
Currently, this mutual fund is holding 98.37% stock in stocks, and these companies have an average market capitalization of $56.01 billion. The fund has the heaviest exposure to the following market sectors:
- Consumer Durables
- Industrial Cyclical
This fund's turnover is about 272%, so the fund managers are making more trades in a given year than the average of comparable funds.
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, CGMRX is a no load fund. It has an expense ratio of 0.98% compared to the category average of 1.26%. Looking at the fund from a cost perspective, CGMRX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $50.
Overall, CGM Realty Fund has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
This could just be the start of your research on CGMRX in the Sector - Real Estate category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.