If investors are looking at the Mutual Fund Equity Report fund category, make sure to pass over Ariel Fund Investor (ARGFX). ARGFX bears 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
Ariel is based in Chicago, IL, and is the manager of ARGFX. Ariel Fund Investor made its debut in November of 1986, and since then, ARGFX has accumulated about $1.43 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 9.14%, 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 13.75%, 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. Compared to the category average of 18.76%, the standard deviation of ARGFX over the past three years is 25.65%. The fund's standard deviation over the past 5 years is 23.23% compared to the category average of 16.74%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.27, so investors should note that it is hypothetically more 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. ARGFX's 5-year performance has produced a negative alpha of -5.69, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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.
Right now, 75.58% of this mutual fund's holdings are stocks, which have an average market capitalization of $10.46 billion. The fund has the heaviest exposure to the following market sectors:
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Non-Durable
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Finance
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Services
With turnover at about 32%, this fund makes fewer trades than its comparable peers.