Is American Funds Mutual Fund A (AMRMX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Large Cap Value fund? Starting with American Funds Mutual Fund A (AMRMX) is one possibility. AMRMX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

AMRMX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds’high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.

American Funds is based in Los Angeles, CA, and is the manager of AMRMX. American Funds Mutual Fund A made its debut in February of 1950, and since then, AMRMX has accumulated about $38 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 carries a 5-year annualized total return of 9.45%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.3%, 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. Over the past three years, AMRMX’s standard deviation comes in at 13.07%, compared to the category average of 14.43%. The standard deviation of the fund over the past 5 years is 14.51% compared to the category average of 15.45%. This makes the fund less volatile than its peers over the past half-decade.

With a 5-year beta of 0.75, 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. Over the past 5 years, the fund has a negative alpha of -1.88. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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