Is Akre Focus Retail (AKREX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Large Cap Growth fund might consider looking past Akre Focus Retail (AKREX). AKREX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
AKREX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.
History of Fund/Manager
Akre is based in Middleburg, VA, and is the manager of AKREX. Since Akre Focus Retail made its debut in August of 2009, AKREX has garnered more than $5.67 billion in assets. The fund's current manager is a team of investment professionals.
Of course, investors look for strong performance in funds. AKREX has a 5-year annualized total return of 14.54% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.33%, 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 10.82%, the standard deviation of AKREX over the past three years is 11.18%. The standard deviation of the fund over the past 5 years is 10.85% compared to the category average of 10.98%. This makes the fund less volatile than its peers over the past half-decade.
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Nevertheless, with a 5-year beta of 0.77, 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. With a positive alpha of 6.78, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, AKREX is a no load fund. It has an expense ratio of 1.32% compared to the category average of 1.06%. From a cost perspective, AKREX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,000, investors should also note that each subsequent investment needs to be at least $250.
Overall, Akre Focus Retail ( AKREX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, this fund looks like a poor potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.