Is JHancock Regional Bank A (FRBAX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Sector – Finance fund? Starting with JHancock Regional Bank A (FRBAX) is one possibility. FRBAX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
FRBAX is one of many Sector – Finance funds to choose from. Sector – Finance mutual funds provide investors with a diversified and stabilized investment approach focused on the financial space, which is a notoriously large, complex, and heavily-regulated industry. These funds include everything from insurance companies and exchanges to banks and investment giants; interest rates can impact the players of this space as well.
History of Fund/Manager
FRBAX is a part of the John Hancock family of funds, a company based out of Boston, MA. The JHancock Regional Bank A made its debut in January of 1992 and FRBAX has managed to accumulate roughly $625.86 million in assets, as of the most recently available information. The fund’s current manager, Susan Curry, has been in charge of the fund since May of 2006.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 5.31%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 26.3%, which places it in the middle 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 FRBAX over the past three years is 24.77% compared to the category average of 12.96%. Over the past 5 years, the standard deviation of the fund is 25.01% compared to the category average of 14.73%. 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 0.8, 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. FRBAX has generated a negative alpha over the past five years of -4.1, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, FRBAX is a load fund. It has an expense ratio of 1.20% compared to the category average of 0.98%. So, FRBAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, worse downside risk, and higher fees, JHancock Regional Bank A ( FRBAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Want even more information about FRBAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Get Your Free (FRBAX): Fund Analysis Report
This article originally published on Zacks Investment Research (zacks.com).