Is Loomis Sayles Growth Fund A (LGRRX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Loomis Sayles Growth Fund A (LGRRX). LGRRX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
LGRRX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
Natixis Funds is based in Kansas City, MO, and is the manager of LGRRX. The Loomis Sayles Growth Fund A made its debut in May of 1991 and LGRRX has managed to accumulate roughly $1.26 billion in assets, as of the most recently available information. Aziz V. Hamzaogullari is the fund's current manager and has held that role since May of 2010.
Of course, investors look for strong performance in funds. LGRRX has a 5-year annualized total return of 13.4% 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 14.29%, which places it in the middle 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. The standard deviation of LGRRX over the past three years is 13.98% compared to the category average of 10.32%. The fund's standard deviation over the past 5 years is 13.81% compared to the category average of 10.4%. This makes the fund more volatile than its peers over the past half-decade.
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In LGRRX's case, the fund lost 54.96% in the most recent bear market and underperformed comparable funds by 6%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 1.09, so it is likely going to be more volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a positive alpha of 2.42, managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Investigating the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
This fund is currently holding about 88.7% stock in stocks, which have an average market capitalization of $275.27 billion. The fund has the heaviest exposure to the following market sectors:
- Retail Trade
- Industrial Cyclical
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, LGRRX is a load fund. It has an expense ratio of 0.91% compared to the category average of 1.05%. So, LGRRX is actually cheaper than its peers from a cost perspective.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $50.
Overall, Loomis Sayles Growth Fund A ( LGRRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Loomis Sayles Growth Fund A ( LGRRX ) looks like a good potential choice for investors right now.
This could just be the start of your research on LGRRXin the Large Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.
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