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Large Cap Growth fund seekers should not consider taking a look at Laudus US Large Cap Growth (LGILX) at this time. LGILX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify LGILX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Laudus is responsible for LGILX, and the company is based out of Boston, MA. Laudus US Large Cap Growth made its debut in July of 2009, and since then, LGILX has accumulated about $2.39 billion in assets, per the most up-to-date date available. The fund's current manager, Lawrence G. Kemp, has been in charge of the fund since October of 2013.
Performance
Investors naturally seek funds with strong performance. LGILX has a 5-year annualized total return of 12.43% and is 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 18.02%, 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. Looking at the past 5 years, the fund's standard deviation is 14.17% compared to the category average of 1.05%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.
Nevertheless, with a 5-year beta of 1.13, the fund is likely to be more 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. Over the past 5 years, the fund has a positive alpha of 0.4. This means that managers in this portfolio are skilled in picking 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 primarily on equities that are traded in the United States.