Having trouble finding an Allocation Balanced fund? Dodge & Cox Balanced Fund (DODBX) is a potential starting point. DODBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
DODBX 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
Dodge & Cox is responsible for DODBX, and the company is based out of Boston, MA. The Dodge & Cox Balanced Fund made its debut in December of 1967 and DODBX has managed to accumulate roughly $15.51 billion in assets, as of the most recently available information. A team of investment professionals is the fund’s current manager.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 12.06%, and it sits 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 11.85%, 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. Over the past three years, DODBX’s standard deviation comes in at 16.33%, compared to the category average of 12.92%. Over the past 5 years, the standard deviation of the fund is 13.14% compared to the category average of 10.48%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.81, 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 negative alpha of -2.29, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is principally on equities that are traded in the United States.
The mutual fund currently has 78.71% of its holdings in stocks, which have an average market capitalization of $201.65 billion. The fund has the heaviest exposure to the following market sectors:
This fund’s turnover is about 58%, so the fund managers are making fewer trades than its comparable peers.
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, DODBX is a no load fund. It has an expense ratio of 0.53% compared to the category average of 0.89%. From a cost perspective, DODBX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $100.
Overall, Dodge & Cox Balanced Fund ( DODBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Dodge & Cox Balanced Fund ( DODBX ) 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 Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.