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Is TETON Convertible Securities AAA (WESRX) a Strong Mutual Fund Pick Right Now?
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Sector - Real Estate fund seekers should not consider taking a look at TETON Convertible Securities AAA (WESRX - Free Report) at this time. WESRX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify WESRX in the Sector - Real Estate category, an area full of possible choices. Sector - Real Estate mutual funds typically invest in various real estate investment trusts (REITs). A REIT is a popular income vehicle thanks to taxation rules that require REITs to payout at least 90% of their income each year in order to avoid double taxation. This technique makes securities here high dividend payers, and almost bond-like in some cases; however, they still carry the risk of equities.
History of Fund/Manager
TETON is based in Rye, NY, and is the manager of WESRX. Since TETON Convertible Securities AAA made its debut in September of 1997, WESRX has garnered more than $4.34 million in assets. The fund is currently managed by James Dinsmore who has been in charge of the fund since October of 2016.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.66%, and is 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 17.12%, which places it in the bottom 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 10.51%, the standard deviation of WESRX over the past three years is 14.37%. The fund's standard deviation over the past 5 years is 14.5% compared to the category average of 12.23%. 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 0.77, so it is likely going to be less 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. Over the past 5 years, the fund has a negative alpha of -5.42. 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.
The mutual fund currently has 81.2% of its holdings in stocks and it has a negligible amount of assets in foreign securities.
Turnover is about 63%, so those in charge of the fund make fewer trades than the average comparable fund.
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, WESRX is a no load fund. It has an expense ratio of 1.16% compared to the category average of 0.97%. So, WESRX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, TETON Convertible Securities AAA ( WESRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, TETON Convertible Securities AAA ( WESRX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds 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 TETON Convertible Securities AAA (WESRX) a Strong Mutual Fund Pick Right Now?
Sector - Real Estate fund seekers should not consider taking a look at TETON Convertible Securities AAA (WESRX - Free Report) at this time. WESRX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify WESRX in the Sector - Real Estate category, an area full of possible choices. Sector - Real Estate mutual funds typically invest in various real estate investment trusts (REITs). A REIT is a popular income vehicle thanks to taxation rules that require REITs to payout at least 90% of their income each year in order to avoid double taxation. This technique makes securities here high dividend payers, and almost bond-like in some cases; however, they still carry the risk of equities.
History of Fund/Manager
TETON is based in Rye, NY, and is the manager of WESRX. Since TETON Convertible Securities AAA made its debut in September of 1997, WESRX has garnered more than $4.34 million in assets. The fund is currently managed by James Dinsmore who has been in charge of the fund since October of 2016.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 5.66%, and is 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 17.12%, which places it in the bottom 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 10.51%, the standard deviation of WESRX over the past three years is 14.37%. The fund's standard deviation over the past 5 years is 14.5% compared to the category average of 12.23%. 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 0.77, so it is likely going to be less 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. Over the past 5 years, the fund has a negative alpha of -5.42. 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.
The mutual fund currently has 81.2% of its holdings in stocks and it has a negligible amount of assets in foreign securities.
Turnover is about 63%, so those in charge of the fund make fewer trades than the average comparable fund.
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, WESRX is a no load fund. It has an expense ratio of 1.16% compared to the category average of 0.97%. So, WESRX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, TETON Convertible Securities AAA ( WESRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and higher fees, TETON Convertible Securities AAA ( WESRX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Sector - Real Estate, make sure to go to www.zacks.com/funds/mutual-funds 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.