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Is American Funds Mutual Fund A (AMRMX) a Strong Mutual Fund Pick Right Now?
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Any investors hoping to find a Large Cap Value fund could think about starting with American Funds Mutual Fund A (AMRMX - Free Report) . AMRMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
AMRMX 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
American Funds is based in Los Angeles, CA, and is the manager of AMRMX. Since American Funds Mutual Fund A made its debut in February of 1950, AMRMX has garnered more than $27.26 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 8.52%, 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 11.68%, 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. AMRMX's standard deviation over the past three years is 9.04% compared to the category average of 9.81%. Over the past 5 years, the standard deviation of the fund is 9.56% compared to the category average of 9.83%. 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. AMRMX lost 43.28% in the most recent bear market and outperformed its peer group by 8%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 0.77, 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. AMRMX has generated a negative alpha over the past five years of -0.19, demonstrating that 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, AMRMX is a load fund. It has an expense ratio of 0.59% compared to the category average of 1.01%. So, AMRMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Mutual Fund A ( AMRMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Mutual Fund A ( AMRMX ) looks like a good potential choice for investors right now.
This could just be the start of your research on AMRMXin the Large Cap Value 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 are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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Is American Funds Mutual Fund A (AMRMX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Value fund could think about starting with American Funds Mutual Fund A (AMRMX - Free Report) . AMRMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
AMRMX 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
American Funds is based in Los Angeles, CA, and is the manager of AMRMX. Since American Funds Mutual Fund A made its debut in February of 1950, AMRMX has garnered more than $27.26 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 8.52%, 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 11.68%, 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. AMRMX's standard deviation over the past three years is 9.04% compared to the category average of 9.81%. Over the past 5 years, the standard deviation of the fund is 9.56% compared to the category average of 9.83%. 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. AMRMX lost 43.28% in the most recent bear market and outperformed its peer group by 8%. This could mean that the fund is a better choice than comparable funds during a bear market.
Nevertheless, with a 5-year beta of 0.77, 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. AMRMX has generated a negative alpha over the past five years of -0.19, demonstrating that 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, AMRMX is a load fund. It has an expense ratio of 0.59% compared to the category average of 1.01%. So, AMRMX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Mutual Fund A ( AMRMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Mutual Fund A ( AMRMX ) looks like a good potential choice for investors right now.
This could just be the start of your research on AMRMXin the Large Cap Value 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 are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.