Markets

Is John Hancock Regional Bank A (FRBAX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Sector - Finance funds, consider John Hancock Regional Bank A (FRBAX) as a possibility. FRBAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

FRBAX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.

History of Fund/Manager

John Hancock is based in Boston, MA, and is the manager of FRBAX. Since John Hancock Regional Bank A made its debut in January of 1992, FRBAX has garnered more than $874.46 million in assets. 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. FRBAX has a 5-year annualized total return of 7.94% and is 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 7.88%, 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. Over the past three years, FRBAX's standard deviation comes in at 19.75%, compared to the category average of 0.07%. Over the past 5 years, the standard deviation of the fund is 17.44% compared to the category average of 1.42%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In FRBAX's case, the fund lost 54.74% in the most recent bear market and underperformed its peer group by 5474%. This means that the fund could possibly be a worse choice than its peers during a down market environment.

Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be more volatile than the market at large. 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. With a negative alpha of 0, 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, FRBAX is a load fund. It has an expense ratio of 1.21% compared to the category average of -61.50%. Looking at the fund from a cost perspective, FRBAX is actually more expensive than its peers.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.

Bottom Line

Overall, John Hancock Regional Bank A ( FRBAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, John Hancock Regional Bank A ( FRBAX ) looks like a good potential choice for investors right now.

Want even more information about FRBAX? 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

To read this article on Zacks.com click here.

Zacks Investment Research

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

FRBAX

Other Topics

Stocks

Latest Markets Videos

Zacks

Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

Learn More