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Is American Funds Balanced A (ABALX) a Strong Mutual Fund Pick Right Now?
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If you have been looking for Mutual Fund Equity Report funds, a place to start could be American Funds Balanced A (ABALX - Free Report) . ABALX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of ABALX. The American Funds Balanced A made its debut in September of 1932 and ABALX has managed to accumulate roughly $90.86 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. ABALX has a 5-year annualized total return of 5.64% 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 5.65%, 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 17.21%, the standard deviation of ABALX over the past three years is 13.46%. The fund's standard deviation over the past 5 years is 11.6% compared to the category average of 14.95%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. ABALX has a 5-year beta of 0.6, which means it is likely to be less volatile than 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. ABALX has generated a negative alpha over the past five years of -1.08, demonstrating that managers in this portfolio find it difficult to pick 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, ABALX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0.86%. From a cost perspective, ABALX is actually cheaper than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Balanced A ( ABALX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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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Is American Funds Balanced A (ABALX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Mutual Fund Equity Report funds, a place to start could be American Funds Balanced A (ABALX - Free Report) . ABALX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of ABALX. The American Funds Balanced A made its debut in September of 1932 and ABALX has managed to accumulate roughly $90.86 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. ABALX has a 5-year annualized total return of 5.64% 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 5.65%, 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 17.21%, the standard deviation of ABALX over the past three years is 13.46%. The fund's standard deviation over the past 5 years is 11.6% compared to the category average of 14.95%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. ABALX has a 5-year beta of 0.6, which means it is likely to be less volatile than 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. ABALX has generated a negative alpha over the past five years of -1.08, demonstrating that managers in this portfolio find it difficult to pick 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, ABALX is a load fund. It has an expense ratio of 0.56% compared to the category average of 0.86%. From a cost perspective, ABALX is actually cheaper than its peers.
While the minimum initial investment for the product is $250, investors should also note that each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Funds Balanced A ( ABALX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.