Large Cap Value fund seekers may want to consider taking a look at BlackRock Equity Dividend R (MRDVX). MRDVX has a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
MRDVX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds'high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
MRDVX finds itself in the BlackRock family, based out of New York, NY. BlackRock Equity Dividend R made its debut in January of 2003, and since then, MRDVX has accumulated about $413.20 million in assets, per the most up-to-date date available. The fund is currently managed by Tony DeSpirito who has been in charge of the fund since August of 2014.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 10.74%, and is in the bottom 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 7.5%, which places it in the middle third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 14.76%, the standard deviation of MRDVX over the past three years is 15.47%. The fund's standard deviation over the past 5 years is 17.49% compared to the category average of 15.7%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 0.85, the fund is likely to be less volatile than the market average. 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. MRDVX has generated a negative alpha over the past five years of -2.54, demonstrating 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, MRDVX is a no load fund. It has an expense ratio of 1.28% compared to the category average of 0.94%. From a cost perspective, MRDVX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively weak performance, average downside risk, and higher fees, BlackRock Equity Dividend R ( MRDVX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Value, make sure to go to www.zacks.com/funds/mutual-funds 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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