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Is Invesco Diversified Dividend A (LCEAX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Large Cap Blend fund? Well, Invesco Diversified Dividend A (LCEAX - Free Report) would not be a good potential starting point right now. LCEAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LCEAX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Invesco is responsible for LCEAX, and the company is based out of Kansas City, MO. Since Invesco Diversified Dividend A made its debut in December of 2001, LCEAX has garnered more than $5.05 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. LCEAX has a 5-year annualized total return of 7.21% 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 6.8%, 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 LCEAX over the past three years is 8.37% compared to the category average of 9.2%. The fund's standard deviation over the past 5 years is 8.54% compared to the category average of 9.57%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In LCEAX's case, the fund lost 44.52% in the most recent bear market and outperformed its peer group by 4.85%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 0.69, the fund is likely to be less volatile than the market average. 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. LCEAX has generated a negative alpha over the past five years of -0.92, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, LCEAX is a load fund. It has an expense ratio of 0.79% compared to the category average of 0.96%. LCEAX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Invesco Diversified Dividend A ( LCEAX ) has a low Zacks Mutual Fund rank, weak performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds 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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Is Invesco Diversified Dividend A (LCEAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Large Cap Blend fund? Well, Invesco Diversified Dividend A (LCEAX - Free Report) would not be a good potential starting point right now. LCEAX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
LCEAX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a " buy and hold " mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.
History of Fund/Manager
Invesco is responsible for LCEAX, and the company is based out of Kansas City, MO. Since Invesco Diversified Dividend A made its debut in December of 2001, LCEAX has garnered more than $5.05 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. LCEAX has a 5-year annualized total return of 7.21% 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 6.8%, 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 LCEAX over the past three years is 8.37% compared to the category average of 9.2%. The fund's standard deviation over the past 5 years is 8.54% compared to the category average of 9.57%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In LCEAX's case, the fund lost 44.52% in the most recent bear market and outperformed its peer group by 4.85%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Nevertheless, with a 5-year beta of 0.69, the fund is likely to be less volatile than the market average. 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. LCEAX has generated a negative alpha over the past five years of -0.92, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, LCEAX is a load fund. It has an expense ratio of 0.79% compared to the category average of 0.96%. LCEAX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Bottom Line
Overall, Invesco Diversified Dividend A ( LCEAX ) has a low Zacks Mutual Fund rank, weak performance, average downside risk, and lower fees compared to its peers.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds 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.