There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that might be worth investigating is American Century Ultra Investor (TWCUX). TWCUX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
TWCUX finds itself in the American Century family, based out of Kansas City, MO. American Century Ultra Investor debuted in November of 1981. Since then, TWCUX has accumulated assets of about $14.95 billion, according to the most recently available information. The fund’s current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. TWCUX has a 5-year annualized total return of 16.64% and it sits in the top third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 18.98%, 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. Over the past three years, TWCUX’s standard deviation comes in at 22.65%, compared to the category average of 16.15%. The standard deviation of the fund over the past 5 years is 20.25% compared to the category average of 14.21%. This makes the fund more 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. TWCUX has a 5-year beta of 1.16, which means it is likely to be more volatile than the market average. 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. TWCUX has generated a positive alpha over the past five years of 1.54, demonstrating that managers in this portfolio are skilled in picking 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 mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 98.52% stock in stocks, which have an average market capitalization of $571.33 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 8%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, TWCUX is a no load fund. It has an expense ratio of 0.95% compared to the category average of 0.99%. Looking at the fund from a cost perspective, TWCUX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $2,500 and that each subsequent investment needs to be at $50.
Overall, American Century Ultra Investor ( TWCUX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse 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 Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.