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Is Invesco American Franchise A (VAFAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Large Cap Growth fund? Well, Invesco American Franchise A (VAFAX - Free Report) would not be a good potential starting point right now. VAFAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VAFAX 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
VAFAX is a part of the Invesco family of funds, a company based out of Kansas City, MO. Invesco American Franchise A made its debut in June of 2005, and since then, VAFAX has accumulated about $10.52 billion in assets, per the most up-to-date date available. The fund's current manager, Ido Cohen, has been in charge of the fund since June of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.25%, 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 7.67%, 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. The standard deviation of VAFAX over the past three years is 14.76% compared to the category average of 9.76%. Looking at the past 5 years, the fund's standard deviation is 13.95% compared to the category average of 9.64%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In VAFAX's case, the fund lost 42.16% in the most recent bear market and outperformed its peer group by 6.68%. 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 1.14, 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 -1.92, 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 primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 92.78% stock in stocks, which have an average market capitalization of $349.14 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
This fund's turnover is about 44%, so the fund managers are making fewer trades than its comparable peers.
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, VAFAX is a load fund. It has an expense ratio of 1.01% compared to the category average of 1.05%. So, VAFAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Invesco American Franchise A ( VAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Large Cap Growth 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Invesco American Franchise A (VAFAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Growth fund? Well, Invesco American Franchise A (VAFAX - Free Report) would not be a good potential starting point right now. VAFAX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
VAFAX 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
VAFAX is a part of the Invesco family of funds, a company based out of Kansas City, MO. Invesco American Franchise A made its debut in June of 2005, and since then, VAFAX has accumulated about $10.52 billion in assets, per the most up-to-date date available. The fund's current manager, Ido Cohen, has been in charge of the fund since June of 2010.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 7.25%, 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 7.67%, 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. The standard deviation of VAFAX over the past three years is 14.76% compared to the category average of 9.76%. Looking at the past 5 years, the fund's standard deviation is 13.95% compared to the category average of 9.64%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In VAFAX's case, the fund lost 42.16% in the most recent bear market and outperformed its peer group by 6.68%. 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 1.14, 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 -1.92, 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 primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 92.78% stock in stocks, which have an average market capitalization of $349.14 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
This fund's turnover is about 44%, so the fund managers are making fewer trades than its comparable peers.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, VAFAX is a load fund. It has an expense ratio of 1.01% compared to the category average of 1.05%. So, VAFAX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Invesco American Franchise A ( VAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
Your research on the Large Cap Growth 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. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.