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If investors are looking at the Mutual Fund Equity Report fund category, AQR Large Cap Defensive Style I (AUEIX) could be a potential option. AUEIX 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
AQR Funds is based in Denver, CO, and is the manager of AUEIX. Since AQR Large Cap Defensive Style I made its debut in July of 2012, AUEIX has garnered more than $3.90 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 14.08%, 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 14.32%, which places it in the bottom 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. Compared to the category average of 15.72%, the standard deviation of AUEIX over the past three years is 16.38%. Over the past 5 years, the standard deviation of the fund is 14.4% compared to the category average of 13.96%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.88, so it is likely going to be less volatile than 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 -0.08, 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, AUEIX is a no load fund. It has an expense ratio of 0.37% compared to the category average of 0.92%. AUEIX is actually cheaper than its peers when you consider factors like cost.
This fund requires a minimum initial investment of $5 million, while there is no minimum for each subsequent investment.
Bottom Line
Overall, AQR Large Cap Defensive Style I ( AUEIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.