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Is American Funds Cap Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
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Have you been searching for a Large Cap Blend fund? You might want to begin with American Funds Cap Income Builder A (CAIBX - Free Report) . CAIBX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CAIBX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
CAIBX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. American Funds Cap Income Builder A made its debut in July of 1987, and since then, CAIBX has accumulated about $65.20 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.32%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.12%, 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. CAIBX's standard deviation over the past three years is 7.6% compared to the category average of 10.15%. The fund's standard deviation over the past 5 years is 7.99% compared to the category average of 10.04%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In CAIBX's case, the fund lost 40.71% in the most recent bear market and outperformed its peer group by 9%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.57, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. CAIBX's 5-year performance has produced a negative alpha of -2.32, which means 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, CAIBX is a load fund. It has an expense ratio of 0.60% compared to the category average of 1.01%. From a cost perspective, CAIBX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Cap Income Builder A ( CAIBX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Funds Cap Income Builder A ( CAIBX ) looks like a somewhat average choice for investors right now.
Your research on the Large Cap Blend 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is American Funds Cap Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Large Cap Blend fund? You might want to begin with American Funds Cap Income Builder A (CAIBX - Free Report) . CAIBX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CAIBX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
CAIBX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. American Funds Cap Income Builder A made its debut in July of 1987, and since then, CAIBX has accumulated about $65.20 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 3.32%, and is in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 4.12%, 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. CAIBX's standard deviation over the past three years is 7.6% compared to the category average of 10.15%. The fund's standard deviation over the past 5 years is 7.99% compared to the category average of 10.04%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In CAIBX's case, the fund lost 40.71% in the most recent bear market and outperformed its peer group by 9%. This could mean that the fund is a better choice than comparable funds during a bear market.
Investors should note that the fund has a 5-year beta of 0.57, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. CAIBX's 5-year performance has produced a negative alpha of -2.32, which means 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, CAIBX is a load fund. It has an expense ratio of 0.60% compared to the category average of 1.01%. From a cost perspective, CAIBX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, American Funds Cap Income Builder A ( CAIBX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, American Funds Cap Income Builder A ( CAIBX ) looks like a somewhat average choice for investors right now.
Your research on the Large Cap Blend 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. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.