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Is American Funds Balanced R3 (RLBCX) a Strong Mutual Fund Pick Right Now?
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On the lookout for an Allocation Balanced fund? Starting with American Funds Balanced R3 (RLBCX - Free Report) is one possibility. RLBCX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as RLBCX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of RLBCX. American Funds Balanced R3 debuted in July of 1975. Since then, RLBCX has accumulated assets of about $2.99 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 6.95%, and it sits in the top 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 8.36%, 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. Compared to the category average of 9.13%, the standard deviation of RLBCX over the past three years is 7.02%. The fund's standard deviation over the past 5 years is 7.39% compared to the category average of 9.32%. 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 RLBCX's case, the fund lost 37.2% in the most recent bear market and underperformed comparable funds by 0.92%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.6, which means it is hypothetically less 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 positive alpha of 0.14, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, RLBCX is a no load fund. It has an expense ratio of 0.93% compared to the category average of 0.89%. RLBCX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Balanced R3 ( RLBCX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Your research on the Allocation Balanced 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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Is American Funds Balanced R3 (RLBCX) a Strong Mutual Fund Pick Right Now?
On the lookout for an Allocation Balanced fund? Starting with American Funds Balanced R3 (RLBCX - Free Report) is one possibility. RLBCX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as RLBCX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of RLBCX. American Funds Balanced R3 debuted in July of 1975. Since then, RLBCX has accumulated assets of about $2.99 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 6.95%, and it sits in the top 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 8.36%, 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. Compared to the category average of 9.13%, the standard deviation of RLBCX over the past three years is 7.02%. The fund's standard deviation over the past 5 years is 7.39% compared to the category average of 9.32%. 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 RLBCX's case, the fund lost 37.2% in the most recent bear market and underperformed comparable funds by 0.92%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.6, which means it is hypothetically less 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 positive alpha of 0.14, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, RLBCX is a no load fund. It has an expense ratio of 0.93% compared to the category average of 0.89%. RLBCX is actually more expensive than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Bottom Line
Overall, American Funds Balanced R3 ( RLBCX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Your research on the Allocation Balanced 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. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.