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Is Invesco Comstock A (ACSTX) a Strong Mutual Fund Pick Right Now?

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Large Cap Value fund seekers should consider taking a look at Invesco Comstock A (ACSTX - Free Report) . ACSTX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

ACSTX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.

History of Fund/Manager

ACSTX finds itself in the Invesco family, based out of Kansas City, MO. The Invesco Comstock A made its debut in October of 1968 and ACSTX has managed to accumulate roughly $6.43 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 10.57%, and is in the middle 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 15.18%, 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. Compared to the category average of 9.02%, the standard deviation of ACSTX over the past three years is 11.91%. The standard deviation of the fund over the past 5 years is 11.6% compared to the category average of 8.78%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In ACSTX's case, the fund lost 53.12% in the most recent bear market and outperformed its peer group by 2.81%. These results could imply that the fund is a better choice than its peers during a sliding market environment.

Even still, the fund has a 5-year beta of 1.09, so investors should note that 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. The fund has produced a negative alpha over the past 5 years of -3.95, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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.

The mutual fund currently has 81.51% of its holdings in stocks, which have an average market capitalization of $116.16 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance
  2. Energy
  3. Technology
Turnover is about 14%, so those in charge of the fund make fewer trades than its comparable peers.

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, ACSTX is a load fund. It has an expense ratio of 0.81% compared to the category average of 1.03%. So, ACSTX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, Invesco Comstock A ( ACSTX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Invesco Comstock A ( ACSTX ) looks like a good potential choice for investors right now.

This could just be the start of your research on ACSTXin the Large Cap Value 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. 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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