Have you been searching for a Large Cap Growth fund? You might want to begin with American Funds AMCAP A (AMCPX). AMCPX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
AMCPX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of AMCPX. American Funds AMCAP A made its debut in May of 1967, and since then, AMCPX has accumulated about $38.78 billion in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 13.08%, 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 6.05%, which places it in the bottom 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 AMCPX over the past three years is 19.24% compared to the category average of 14.66%. Looking at the past 5 years, the fund's standard deviation is 18.65% compared to the category average of 15.46%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1, the fund is likely to be as volatile as 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. AMCPX's 5-year performance has produced a negative alpha of -2.39, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, AMCPX is a load fund. It has an expense ratio of 0.67% compared to the category average of 0.95%. AMCPX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and lower fees, American Funds AMCAP A ( AMCPX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
This could just be the start of your research on AMCPXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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