If you have been looking for Mutual Fund Equity Report funds, it would not be wise to start your search with Invesco American Franchise A (VAFAX Quick QuoteVAFAX - Free Report) . VAFAX 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

Invesco is based in Kansas City, MO, and is the manager of VAFAX. Since Invesco American Franchise A made its debut in June of 2005, VAFAX has garnered more than $10.30 billion in assets. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. VAFAX has a 5-year annualized total return of 7.27% and is in the middle 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 5.4%, 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. VAFAX's standard deviation over the past three years is 23.54% compared to the category average of 18.23%. Looking at the past 5 years, the fund's standard deviation is 21% compared to the category average of 15.98%. 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 1.06, so it is likely going to be more 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. Over the past 5 years, the fund has a negative alpha of -2.24. This means 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 mostly on equities that are traded in the United States.

This fund is currently holding about 97.46% stock in stocks, with an average market capitalization of $323.93 billion. The fund has the heaviest exposure to the following market sectors:

• Technology
• Retail Trade
• Industrial Cyclical

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, VAFAX is a load fund. It has an expense ratio of 0.95% compared to the category average of 0.99%. VAFAX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.

Bottom Line

Overall, Invesco American Franchise A ( VAFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Invesco American Franchise A ( VAFAX ) looks like a somewhat weak choice for investors right now.

For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into VAFAX too 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.