There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is Columbia Balanced A (CBLAX). CBLAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
CBLAX is one of many Zacks’ Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Columbia is based in Kansas City, MO, and is the manager of CBLAX. Since Columbia Balanced A made its debut in October of 2002, CBLAX has garnered more than $3.37 billion in assets. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. CBLAX has a 5-year annualized total return of 11.64% and is in the top 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 14.4%, 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. The standard deviation of CBLAX over the past three years is 12.74% compared to the category average of 14.63%. Looking at the past 5 years, the fund’s standard deviation is 10.32% compared to the category average of 12.12%. This makes the fund less volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.68, so investors should note that it is hypothetically 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. The fund has produced a negative alpha over the past 5 years of -0.43, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, CBLAX is a load fund. It has an expense ratio of 0.93% compared to the category average of 0.89%. From a cost perspective, CBLAX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,000; each subsequent investment has no minimum amount.
Overall, Columbia Balanced A ( CBLAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
Want even more information about CBLAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.