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Is Plumb Balanced (PLBBX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Mutual Fund Equity Report funds, it would not be wise to start your search with Plumb Balanced (PLBBX - Free Report) . PLBBX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Plumb is based in Madison, WI, and is the manager of PLBBX. Plumb Balanced debuted in May of 2007. Since then, PLBBX has accumulated assets of about $40.75 million, according to the most recently available information. The fund is currently managed by Thomas G. Plumb who has been in charge of the fund since May of 2007.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 4.17%, and is in the middle 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 1.76%, which places it in the bottom 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 14.5%, the standard deviation of PLBBX over the past three years is 18.52%. Looking at the past 5 years, the fund's standard deviation is 16.18% compared to the category average of 12.6%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.81, so it is likely going to be less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -3.61, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 principally on equities that are traded in the United States.

Currently, this mutual fund is holding 87.5% stock in stocks, and these companies have an average market capitalization of $236.77 billion. The fund has the heaviest exposure to the following market sectors:

  • Other
  • Technology
With turnover at about 38%, this fund is making fewer trades than the average comparable fund.

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, PLBBX is a no load fund. It has an expense ratio of 1.19% compared to the category average of 0.86%. Looking at the fund from a cost perspective, PLBBX is actually more expensive than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $50.

Bottom Line

Overall, Plumb Balanced ( PLBBX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.

Want even more information about PLBBX? 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. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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