Is American Century Select Investor (TWCIX) a Strong Mutual Fund Pick Right Now?

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Mutual Fund Equity Report fund seekers should not consider taking a look at American Century Select Investor (TWCIX) at this time. TWCIX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

American Century is based in Kansas City, MO, and is the manager of TWCIX. The American Century Select Investor made its debut in December of 1961 and TWCIX has managed to accumulate roughly $4.47 billion in assets, as of the most recently available information. A team of investment professionals is the fund’s current manager.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 23.44%, 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 27.17%, 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, TWCIX’s standard deviation comes in at 19.09%, compared to the category average of 15.88%. Looking at the past 5 years, the fund’s standard deviation is 16.18% compared to the category average of 13.11%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.01, so investors should note that it is hypothetically as volatile as 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 positive alpha of 3.88, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Holdings

Exploring 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.

This fund is currently holding about 77.08% stock in stocks, which have an average market capitalization of $601.41 billion. The fund has the heaviest exposure to the following market sectors:

  1. Technology

  2. Retail Trade

Turnover is 12%, which means, on average, the fund makes fewer trades than comparable funds.

Expenses

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, TWCIX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 1.02%. From a cost perspective, TWCIX is actually cheaper than its peers.

While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $50.

Bottom Line

Overall, American Century Select Investor ( TWCIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Want even more information about TWCIX? 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. 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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