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Is Brown Advisory Flexible Equity Investor (BIAFX) a Strong Mutual Fund Pick Right Now?

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Allocation Balanced fund seekers may want to consider taking a look at Brown Advisory Flexible Equity Investor (BIAFX - Free Report) . BIAFX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Zacks' Allocation Balanced funds is an area filled with options, such as BIAFX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.

History of Fund/Manager

BIAFX finds itself in the Brown Adv Fds family, based out of Portland, ME. Brown Advisory Flexible Equity Investor debuted in December of 2006. Since then, BIAFX has accumulated assets of about $284.42 million, according to the most recently available information. The fund's current manager, R. Hutchings Vernon, has been in charge of the fund since May of 2008.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.34%, and it sits 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 9.2%, 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. BIAFX's standard deviation over the past three years is 12.5% compared to the category average of 8.45%. Looking at the past 5 years, the fund's standard deviation is 12.17% compared to the category average of 8.45%. 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. In BIAFX's case, the fund lost 52.7% in the most recent bear market and underperformed its peer group by 16.3%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Investors should note that the fund has a 5-year beta of 1.07, so it is likely going to be more volatile than 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. BIAFX has generated a negative alpha over the past five years of -1.46, demonstrating 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.

As of the last filing date, the mutual fund has 97.03% of its assets in stocks, which have an average market capitalization of $253.31 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology
  2. Finance
This fund's turnover is about 15%, so the fund managers are making fewer trades than comparable funds.

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, BIAFX is a no load fund. It has an expense ratio of 0.87% compared to the category average of 0.88%. BIAFX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $100, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, Brown Advisory Flexible Equity Investor ( BIAFX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Brown Advisory Flexible Equity Investor ( BIAFX ) looks like a somewhat average choice for investors right now.

Your research on the Allocation Balanced segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.


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