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Is Lord Abbett Alpha Strategy A (ALFAX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Mutual Fund Equity Report fund category, Lord Abbett Alpha Strategy A (ALFAX - Free Report) could be a potential option. ALFAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Lord Abbett is based in Jersey City, NJ, and is the manager of ALFAX. Lord Abbett Alpha Strategy A made its debut in March of 1998, and since then, ALFAX has accumulated about $397.99 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. ALFAX has a 5-year annualized total return of 5.43% and it sits in the bottom 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 12.82%, 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 16.29%, the standard deviation of ALFAX over the past three years is 20.26%. Looking at the past 5 years, the fund's standard deviation is 22.74% compared to the category average of 16.16%. This makes the fund more 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. ALFAX has a 5-year beta of 1.11, which means it is likely to be more 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. The fund has produced a negative alpha over the past 5 years of -5.73, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, ALFAX is a load fund. It has an expense ratio of 0.44% compared to the category average of 1.06%. So, ALFAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Lord Abbett Alpha Strategy A ( ALFAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Want even more information about ALFAX? 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. 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.
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Is Lord Abbett Alpha Strategy A (ALFAX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Mutual Fund Equity Report fund category, Lord Abbett Alpha Strategy A (ALFAX - Free Report) could be a potential option. ALFAX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Lord Abbett is based in Jersey City, NJ, and is the manager of ALFAX. Lord Abbett Alpha Strategy A made its debut in March of 1998, and since then, ALFAX has accumulated about $397.99 million in assets, per the most up-to-date date available. The fund is currently managed by a team of investment professionals.
Performance
Investors naturally seek funds with strong performance. ALFAX has a 5-year annualized total return of 5.43% and it sits in the bottom 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 12.82%, 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 16.29%, the standard deviation of ALFAX over the past three years is 20.26%. Looking at the past 5 years, the fund's standard deviation is 22.74% compared to the category average of 16.16%. This makes the fund more 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. ALFAX has a 5-year beta of 1.11, which means it is likely to be more 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. The fund has produced a negative alpha over the past 5 years of -5.73, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, ALFAX is a load fund. It has an expense ratio of 0.44% compared to the category average of 1.06%. So, ALFAX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $1,500; each subsequent investment has no minimum amount.
Bottom Line
Overall, Lord Abbett Alpha Strategy A ( ALFAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
Want even more information about ALFAX? 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. 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.