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 Funds Mutual Fund A (AMRMX). AMRMX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of AMRMX. Since American Funds Mutual Fund A made its debut in February of 1950, AMRMX has garnered more than $35.57 billion in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 8.08%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 10.3%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. The standard deviation of AMRMX over the past three years is 14.03% compared to the category average of 17.38%. Looking at the past 5 years, the fund's standard deviation is 14.45% compared to the category average of 15.33%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.73, so it is likely going to be less volatile than the market at large. 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 -0.5, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 mostly on equities that are traded in the United States.