Is Berkshire Focus Fund (BFOCX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Large Cap Growth fund category, make sure to pass over Berkshire Focus Fund (BFOCX). BFOCX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

BFOCX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

BFOCX finds itself in the Berkshire family, based out of Mikwaukee, WI. Since Berkshire Focus Fund made its debut in July of 1997, BFOCX has garnered more than $286.19 million in assets. The fund is currently managed by Malcolm R. Fobes III who has been in charge of the fund since July of 1997.

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 7.25%, and it sits in the bottom 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 30.53%, 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. Compared to the category average of 24.19%, the standard deviation of BFOCX over the past three years is 35.31%. The fund’s standard deviation over the past 5 years is 36.1% compared to the category average of 24.25%. This makes the fund more volatile than its peers over the past half-decade.

Investors should note that the fund has a 5-year beta of 1.63, which means it is hypothetically more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -11.4, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.