Having trouble finding a Large Cap Value fund? DFA US Large Cap Value II is a possible starting point. DFCVX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
DFCVX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds'high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
DFCVX is a part of the Dimensional family of funds, a company based out of Austin, TX. The DFA US Large Cap Value II made its debut in March of 1996 and DFCVX has managed to accumulate roughly $169.97 million in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 8.4%, and is 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 11.82%, 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. DFCVX's standard deviation over the past three years is 12.33% compared to the category average of 11.01%. The fund's standard deviation over the past 5 years is 12.69% compared to the category average of 11.34%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. DFCVX lost 57.82% in the most recent bear market and underperformed comparable funds by 7.18%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.07, which means 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. With a negative alpha of -3.44, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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.
Right now, 96.21% of this mutual fund's holdings are stocks, which have an average market capitalization of $101.43 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
Turnover is 0%, which means, on average, the fund makes fewer trades than its comparable peers.
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, DFCVX is a no load fund. It has an expense ratio of 0.14% compared to the category average of 0.99%. So, DFCVX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Overall, DFA US Large Cap Value II ( DFCVX ) has a neutral Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
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