If investors are looking at the Large Cap Blend fund category, make sure to pass over CGM Focus Fund . CGMFX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CGMFX 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
CGM is based in Boston, MA, and is the manager of CGMFX. Since CGM Focus Fund made its debut in September of 1997, CGMFX has garnered more than $650.20 million in assets. The fund's current manager, Ken Heebner, has been in charge of the fund since September of 1997.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -0.94%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 0.95%, 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. Over the past three years, CGMFX's standard deviation comes in at 17.56%, compared to the category average of 11.21%. Looking at the past 5 years, the fund's standard deviation is 19.13% compared to the category average of 11.63%. 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 CGMFX's case, the fund lost 58.01% in the most recent bear market and underperformed its peer group by 8.64%. This might suggest that the fund is a worse choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 1.13, 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. With a negative alpha of -11.56, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, CGMFX is a no load fund. It has an expense ratio of 1.18% compared to the category average of 0.96%. So, CGMFX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, CGM Focus Fund ( CGMFX ) has a low Zacks Mutual Fund rank, weak performance, worse downside risk, and higher fees compared to its peers.
This could just be the start of your research on CGMFXin the Large Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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 CGM Focus Fund (CGMFX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Large Cap Blend fund category, make sure to pass over CGM Focus Fund . CGMFX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CGMFX 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
CGM is based in Boston, MA, and is the manager of CGMFX. Since CGM Focus Fund made its debut in September of 1997, CGMFX has garnered more than $650.20 million in assets. The fund's current manager, Ken Heebner, has been in charge of the fund since September of 1997.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -0.94%, and it sits in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 0.95%, 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. Over the past three years, CGMFX's standard deviation comes in at 17.56%, compared to the category average of 11.21%. Looking at the past 5 years, the fund's standard deviation is 19.13% compared to the category average of 11.63%. 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 CGMFX's case, the fund lost 58.01% in the most recent bear market and underperformed its peer group by 8.64%. This might suggest that the fund is a worse choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 1.13, 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. With a negative alpha of -11.56, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, CGMFX is a no load fund. It has an expense ratio of 1.18% compared to the category average of 0.96%. So, CGMFX is actually more expensive than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, CGM Focus Fund ( CGMFX ) has a low Zacks Mutual Fund rank, weak performance, worse downside risk, and higher fees compared to its peers.
This could just be the start of your research on CGMFXin the Large Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank 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.