Large Cap Growth fund seekers should not consider taking a look at American Century Allocation Cap Growth Investor at this time. TWGTX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify TWGTX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
TWGTX is a part of the American Century family of funds, a company based out of Kansas City, MO. Since American Century Allocation Cap Growth Investor made its debut in November of 1983, TWGTX has garnered more than $981.22 million in assets. Joseph Reiland is the fund's current manager and has held that role since February of 2018.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.5%, 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 7.14%, 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 9.89%, the standard deviation of TWGTX over the past three years is 13.08%. Looking at the past 5 years, the fund's standard deviation is 12.6% compared to the category average of 9.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In TWGTX's case, the fund lost 51.97% in the most recent bear market and underperformed comparable funds by 3.13%. This could mean that the fund is a worse choice than comparable funds during a bear market.
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. TWGTX has generated a negative alpha over the past five years of -1.29, 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 98.27% of its assets in stocks, with an average market capitalization of $308.36 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Non-Durable
This fund's turnover is about 44%, 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, TWGTX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.05%. From a cost perspective, TWGTX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Century Allocation Cap Growth Investor ( TWGTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Century Allocation Cap Growth Investor ( TWGTX ) looks like a somewhat weak choice for investors right now.
Want even more information about TWGTX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is American Century Allocation Cap Growth Investor (TWGTX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should not consider taking a look at American Century Allocation Cap Growth Investor at this time. TWGTX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify TWGTX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
TWGTX is a part of the American Century family of funds, a company based out of Kansas City, MO. Since American Century Allocation Cap Growth Investor made its debut in November of 1983, TWGTX has garnered more than $981.22 million in assets. Joseph Reiland is the fund's current manager and has held that role since February of 2018.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 7.5%, 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 7.14%, 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 9.89%, the standard deviation of TWGTX over the past three years is 13.08%. Looking at the past 5 years, the fund's standard deviation is 12.6% compared to the category average of 9.76%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In TWGTX's case, the fund lost 51.97% in the most recent bear market and underperformed comparable funds by 3.13%. This could mean that the fund is a worse choice than comparable funds during a bear market.
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. TWGTX has generated a negative alpha over the past five years of -1.29, 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 98.27% of its assets in stocks, with an average market capitalization of $308.36 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Non-Durable
This fund's turnover is about 44%, 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, TWGTX is a no load fund. It has an expense ratio of 1% compared to the category average of 1.05%. From a cost perspective, TWGTX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Century Allocation Cap Growth Investor ( TWGTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, American Century Allocation Cap Growth Investor ( TWGTX ) looks like a somewhat weak choice for investors right now.
Want even more information about TWGTX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.