Is American Funds Investor Company of America A (AIVSX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Blend category, but where should you start your research? Well, one fund that might be worth investigating is American Funds Investor Company of America A (AIVSX). AIVSX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
AIVSX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a ‘buy and hold’ mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
AIVSX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. American Funds Investor Company of America A made its debut in December of 1933, and since then, AIVSX has accumulated about $100.33 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 18.44%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 25.69%, which places it in the top 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. Compared to the category average of 11.98%, the standard deviation of AIVSX over the past three years is 12.17%. Over the past 5 years, the standard deviation of the fund is 14.81% compared to the category average of 13.36%. This makes the fund more volatile than its peers over the past half-decade.
With a 5-year beta of 0.92, the fund is likely to be less 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. AIVSX’s 5-year performance has produced a positive alpha of 1.76, which means 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, AIVSX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0.94%. Looking at the fund from a cost perspective, AIVSX is actually cheaper than its peers.
This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Overall, American Funds Investor Company of America A ( AIVSX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, American Funds Investor Company of America A ( AIVSX ) looks like a good potential choice for investors right now.
Don’t stop here for your research on Large Cap Blend 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 AIVSX to its peers as well 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.
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This article originally published on Zacks Investment Research (zacks.com).