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Is American Funds Capital Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Large Cap Blend funds, a place to start could be American Funds Capital Income Builder A (CAIBX - Free Report) . CAIBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that CAIBX 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
American Funds is based in Los Angeles, CA, and is the manager of CAIBX. American Funds Capital Income Builder A made its debut in July of 1987, and since then, CAIBX has accumulated about $66.99 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 9.86%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 15.37%, 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. Over the past three years, CAIBX's standard deviation comes in at 8.35%, compared to the category average of 10.43%. Over the past 5 years, the standard deviation of the fund is 10.39% compared to the category average of 12.4%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.57, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.34, which shows that managers in this portfolio are skilled in picking 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, CAIBX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.92%. CAIBX is actually cheaper than its peers when you consider factors like cost.
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 consideration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Capital Income Builder A ( CAIBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Capital Income Builder A ( CAIBX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds 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.
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Is American Funds Capital Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Large Cap Blend funds, a place to start could be American Funds Capital Income Builder A (CAIBX - Free Report) . CAIBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We note that CAIBX 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
American Funds is based in Los Angeles, CA, and is the manager of CAIBX. American Funds Capital Income Builder A made its debut in July of 1987, and since then, CAIBX has accumulated about $66.99 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 9.86%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 15.37%, 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. Over the past three years, CAIBX's standard deviation comes in at 8.35%, compared to the category average of 10.43%. Over the past 5 years, the standard deviation of the fund is 10.39% compared to the category average of 12.4%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.57, the fund is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a positive alpha over the past 5 years of 0.34, which shows that managers in this portfolio are skilled in picking 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, CAIBX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.92%. CAIBX is actually cheaper than its peers when you consider factors like cost.
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 consideration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Capital Income Builder A ( CAIBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Capital Income Builder A ( CAIBX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds 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.