Any investors hoping to find a Large Cap Blend fund might consider looking past Columbia Disciplined Core A (AQEAX). AQEAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
AQEAX 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
AQEAX is a part of the Columbia family of funds, a company based out of Kansas City, MO. Columbia Disciplined Core A made its debut in December of 2004, and since then, AQEAX has accumulated about $4.53 billion in assets, per the most up-to-date date available. The fund’s current manager, Raghavendran Sivaraman, has been in charge of the fund since December of 2019.
Investors naturally seek funds with strong performance. AQEAX has a 5-year annualized total return of 17.13% and it sits 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 15.72%, 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, AQEAX’s standard deviation comes in at 18.94%, compared to the category average of 15.56%. Over the past 5 years, the standard deviation of the fund is 15.29% compared to the category average of 12.83%. 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 1.01, which means it is hypothetically as volatile as 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. With a negative alpha of -0.83, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Investigating 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 primarily on equities that are traded in the United States.
Right now, 80.02% of this mutual fund’s holdings are stocks, and these companies have an average market capitalization of $345.90 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
- Industrial Cyclical
Turnover is 72%, which means this fund makes fewer trades than the average comparable fund.
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, AQEAX is a load fund. It has an expense ratio of 0.98% compared to the category average of 0.95%. Looking at the fund from a cost perspective, AQEAX is actually more expensive than its peers.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Overall, Columbia Disciplined Core A ( AQEAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on the Large Cap Blend area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into AQEAX too 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.