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 Income & Growth Investor (BIGRX). BIGRX carries 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
American Century is based in Kansas City, MO, and is the manager of BIGRX. The American Century Income & Growth Investor made its debut in December of 1990 and BIGRX has managed to accumulate roughly $2.05 billion in assets, as of the most recently available information. Steven Rossi is the fund's current manager and has held that role since April of 2020.
Performance
Of course, investors look for strong performance in funds. BIGRX has a 5-year annualized total return of 12.66% 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 14.99%, 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, BIGRX's standard deviation comes in at 17.21%, compared to the category average of 15.33%. Looking at the past 5 years, the fund's standard deviation is 15.45% compared to the category average of 13.54%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. BIGRX has a 5-year beta of 0.94, which means it is likely to be less volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -2.1, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
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, BIGRX is a no load fund. It has an expense ratio of 0.65% compared to the category average of 0.92%. So, BIGRX is actually cheaper than its peers from a cost perspective.