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Is Wells Fargo Premier Large Company Growth R6 (EKJFX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Wells Fargo Premier Large Company Growth R6 (EKJFX - Free Report) . EKJFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
EKJFX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Wells Fargo is based in San Francisco, CA, and is the manager of EKJFX. Wells Fargo Premier Large Company Growth R6 debuted in December of 2012. Since then, EKJFX has accumulated assets of about $182.41 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.23%, 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 9.99%, 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 9.04%, the standard deviation of EKJFX over the past three years is 14.01%. The fund's standard deviation over the past 5 years is 13.01% compared to the category average of 9.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Even still, the fund has a 5-year beta of 1.12, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -2.63. 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 largely on equities that are traded in the United States.
The mutual fund currently has 97.96% of its holdings in stocks, with an average market capitalization of $239.70 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
Turnover is about 45.48%, so those in charge of the fund make fewer trades than comparable funds.
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, EKJFX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 1.10%. EKJFX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Wells Fargo Premier Large Company Growth R6 ( EKJFX ) 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.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into EKJFX too 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 Wells Fargo Premier Large Company Growth R6 (EKJFX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Wells Fargo Premier Large Company Growth R6 (EKJFX - Free Report) . EKJFX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
EKJFX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Wells Fargo is based in San Francisco, CA, and is the manager of EKJFX. Wells Fargo Premier Large Company Growth R6 debuted in December of 2012. Since then, EKJFX has accumulated assets of about $182.41 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.23%, 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 9.99%, 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 9.04%, the standard deviation of EKJFX over the past three years is 14.01%. The fund's standard deviation over the past 5 years is 13.01% compared to the category average of 9.18%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Even still, the fund has a 5-year beta of 1.12, so investors should note that it is hypothetically more volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -2.63. 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 largely on equities that are traded in the United States.
The mutual fund currently has 97.96% of its holdings in stocks, with an average market capitalization of $239.70 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
Turnover is about 45.48%, so those in charge of the fund make fewer trades than comparable funds.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, EKJFX is a no load fund. It has an expense ratio of 0.71% compared to the category average of 1.10%. EKJFX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Wells Fargo Premier Large Company Growth R6 ( EKJFX ) 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.
For additional information on the Large Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into EKJFX too 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.