There are plenty of choices in the Large Cap Value category, but where should you start your research? Well, one fund that might be worth investigating is Columbia Global Equity Value Z (CEVZX - Free Report) . CEVZX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
Columbia is based in Boston, MA, and is the manager of CEVZX. Columbia Global Equity Value Z made its debut in September of 2010, and since then, CEVZX has accumulated about $106.60 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 8.36%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.53%, which places it in the bottom 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. Compared to the category average of 8.99%, the standard deviation of CEVZX over the past three years is 11.22%. The standard deviation of the fund over the past 5 years is 10.55% compared to the category average of 8.85%. 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.
Investors should note that the fund has a 5-year beta of 1.01, 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. The fund has produced a negative alpha over the past 5 years of -4.19, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CEVZX is a no load fund. It has an expense ratio of 0.90% compared to the category average of 1.03%. CEVZX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Overall, Columbia Global Equity Value Z has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
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