Any investors hoping to find a Large Cap Value fund could think about starting with American Funds Mutual Fund A (AMRMX). AMRMX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
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 responsible for AMRMX, and the company is based out of Los Angeles, CA. American Funds Mutual Fund A made its debut in February of 1950, and since then, AMRMX has accumulated about $26.82 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund’s current manager.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.29%, and is in the middle 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 12.36%, which places it in the middle 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 15.3%, the standard deviation of AMRMX over the past three years is 14.55%. The standard deviation of the fund over the past 5 years is 11.97% compared to the category average of 12.66%. This makes the fund less volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. AMRMX has a 5-year beta of 0.77, which means it is likely to be less volatile than the market average. 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 -1, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 0.60% compared to the category average of 1%. Looking at the fund from a cost perspective, AMRMX 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.
Overall, American Funds Mutual Fund A ( AMRMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Value, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.