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Is AB Discovery Growth A (CHCLX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Mid Cap Blend fund category, AB Discovery Growth A (CHCLX - Free Report) could be a potential option. CHCLX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CHCLX is one of many funds to choose from. Because Mid Cap Blend mutual funds typically feature a portfolio filled with stocks of various sizes and styles, it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. Mid-cap blends, while offering exciting growth potential, income opportunities, and value picks, offer some stability as well.
History of Fund/Manager
AllianceBernstein is based in New York, NY, and is the manager of CHCLX. Since AB Discovery Growth A made its debut in July of 1938, CHCLX has garnered more than $693.35 million in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. CHCLX has a 5-year annualized total return of 10.66% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 17.22%, which places it in the top third during this time-frame.
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 10.25%, the standard deviation of CHCLX over the past three years is 18.51%. Looking at the past 5 years, the fund's standard deviation is 17.3% compared to the category average of 10.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, CHCLX lost 59.36% and underperformed comparable funds by 8%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.26, which means it is hypothetically more volatile than the market at large. 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. With a negative alpha of -1.19, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 mostly on equities that are traded in the United States.
Right now, 94.46% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $8.78 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Industrial Cyclical
Other
Services
Health
Turnover is about 66%, so those in charge of the fund make more traders than comparable funds in a given year.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, CHCLX is a load fund. It has an expense ratio of 0.94% compared to the category average of 1.21%. So, CHCLX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, AB Discovery Growth A ( CHCLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, AB Discovery Growth A ( CHCLX ) looks like a good potential choice for investors right now.
Want even more information about CHCLX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is AB Discovery Growth A (CHCLX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mid Cap Blend fund category, AB Discovery Growth A (CHCLX - Free Report) could be a potential option. CHCLX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
CHCLX is one of many funds to choose from. Because Mid Cap Blend mutual funds typically feature a portfolio filled with stocks of various sizes and styles, it allows for a diversification strategy focusing on companies with market caps between $2 billion and $10 billion. Mid-cap blends, while offering exciting growth potential, income opportunities, and value picks, offer some stability as well.
History of Fund/Manager
AllianceBernstein is based in New York, NY, and is the manager of CHCLX. Since AB Discovery Growth A made its debut in July of 1938, CHCLX has garnered more than $693.35 million in assets. The fund's current manager is a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. CHCLX has a 5-year annualized total return of 10.66% and it sits in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 17.22%, which places it in the top third during this time-frame.
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 10.25%, the standard deviation of CHCLX over the past three years is 18.51%. Looking at the past 5 years, the fund's standard deviation is 17.3% compared to the category average of 10.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In the most recent bear market, CHCLX lost 59.36% and underperformed comparable funds by 8%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.26, which means it is hypothetically more volatile than the market at large. 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. With a negative alpha of -1.19, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 mostly on equities that are traded in the United States.
Right now, 94.46% of this mutual fund's holdings are stocks, and these companies have an average market capitalization of $8.78 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Industrial Cyclical
- Other
- Services
- Health
Turnover is about 66%, so those in charge of the fund make more traders than comparable funds in a given year.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, CHCLX is a load fund. It has an expense ratio of 0.94% compared to the category average of 1.21%. So, CHCLX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, AB Discovery Growth A ( CHCLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, AB Discovery Growth A ( CHCLX ) looks like a good potential choice for investors right now.
Want even more information about CHCLX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.