If investors are looking at the Large Cap Value fund category, American Funds Inc Fnd of Amer A (AMECX) could be a potential option. AMECX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
American Funds is responsible for AMECX, and the company is based out of Los Angeles, CA. American Funds Inc Fnd of Amer A debuted in December of 1970. Since then, AMECX has accumulated assets of about $77.86 billion, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Investors naturally seek funds with strong performance. AMECX has a 5-year annualized total return of 9.79% 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 6.77%, which places it in the top third during this time-frame.
Advertisement: High Yield Savings Offers
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. AMECX’s standard deviation over the past three years is 11.34% compared to the category average of 13.65%. Over the past 5 years, the standard deviation of the fund is 10.76% compared to the category average of 13.33%. This makes the fund less volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 0.58, which means it is hypothetically 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. Over the past 5 years, the fund has a negative alpha of -0.4. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
