Is BlackRock Equity Dividend R (MRDVX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Value fund? Starting with BlackRock Equity Dividend R (MRDVX) is one possibility. MRDVX has a Zacks Mutual Fund Rank of 2 (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 is 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.
MRDVX finds itself in the BlackRock family, based out of New York, NY. BlackRock Equity Dividend R debuted in January of 2003. Since then, MRDVX has accumulated assets of about $393.04 million, according to the most recently available information. The fund is currently managed by Tony DeSpirito who has been in charge of the fund since August of 2014.
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 12.71%, and it sits in the bottom 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 12.63%, 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 MRDVX over the past three years is 14.2% compared to the category average of 14.26%. Over the past 5 years, the standard deviation of the fund is 15.39% compared to the category average of 13.79%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.81, the fund is likely to be less volatile than the market average. 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. MRDVX has generated a positive alpha over the past five years of 0.46, demonstrating that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, MRDVX is a no load fund. It has an expense ratio of 1.22% compared to the category average of 0.94%. From a cost perspective, MRDVX is actually more expensive than its peers.
While the minimum initial investment for the product is $100, investors should also note that 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.
Overall, even with its comparatively weak performance, average downside risk, and higher fees, BlackRock Equity Dividend R ( MRDVX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don’t stop here for your research on Large Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare MRDVX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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This article originally published on Zacks Investment Research (zacks.com).