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Is Motley Fool Independence Fund (FOOLX) a Strong Mutual Fund Pick Right Now?

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Global - Equity fund seekers should consider taking a look at Motley Fool Independence Fund (FOOLX). FOOLX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that FOOLX is a Global - Equity option, an investment area loaded with different options. While Global - Equity mutual funds invest their assets in large markets--think the U.S., Europe, and Japan--they aren't limited by geography. Their investment technique is one that leverages the global economy in order to offer stable returns.

History of Fund/Manager

Motley Fool is based in Providence, RI, and is the manager of FOOLX. The Motley Fool Independence Fund made its debut in August of 2009 and FOOLX has managed to accumulate roughly $337.46 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.44%, 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 9.46%, 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. FOOLX's standard deviation over the past three years is 13.11% compared to the category average of 9.62%. Looking at the past 5 years, the fund's standard deviation is 12.01% compared to the category average of 9.83%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of.

Investors should note that the fund has a 5-year beta of 1, so it is likely going to be as volatile as 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. FOOLX has generated a negative alpha over the past five years of -3.29, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, FOOLX is a no load fund. It has an expense ratio of 1.07% compared to the category average of 1.19%. Looking at the fund from a cost perspective, FOOLX is actually cheaper than its peers.

Investors should also note that the minimum initial investment for the product is $500 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, Motley Fool Independence Fund ( FOOLX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Motley Fool Independence Fund ( FOOLX ) looks like a good potential choice for investors right now.

Want even more information about FOOLX? 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. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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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.


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

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