If you have been looking for Large Cap Growth funds, a place to start could be MFS Growth Fund A (MFEGX). MFEGX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
MFEGX 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
MFS is based in Boston, MA, and is the manager of MFEGX. MFS Growth Fund A made its debut in December of 1986, and since then, MFEGX has accumulated about $10.58 billion in assets, per the most up-to-date date available. The fund's current manager, Eric B. Fischman, has been in charge of the fund since April of 2002.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 14.68%, 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 6.99%, 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, MFEGX's standard deviation comes in at 20.04%, compared to the category average of 15.09%. The standard deviation of the fund over the past 5 years is 19.66% compared to the category average of 15.94%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.02, the fund is likely to be as volatile as the market average. 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 positive alpha of 0.22, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
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, MFEGX is a load fund. It has an expense ratio of 0.82% compared to the category average of 0.95%. From a cost perspective, MFEGX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, MFS Growth Fund A ( MFEGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, MFS Growth Fund A ( MFEGX ) looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
