Is PIMCO Allocation Asset A (PASAX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that might be worth investigating is PIMCO Allocation Asset A (PASAX). PASAX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
PASAX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation.
History of Fund/Manager
PASAX finds itself in the PIMCO Funds family, based out of Newport Beach, CA. Since PIMCO Allocation Asset A made its debut in July of 2002, PASAX has garnered more than $943.75 million in assets. The fund is currently managed by Robert Arnott who has been in charge of the fund since April of 2003.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 8.47%, and is 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 9.48%, 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, PASAX's standard deviation comes in at 11.39%, compared to the category average of 14.67%. The standard deviation of the fund over the past 5 years is 9.27% compared to the category average of 12.19%. This makes the fund less volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. PASAX has a 5-year beta of 0.48, which means it 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. PASAX's 5-year performance has produced a negative alpha of -0.52, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PASAX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.89%. Looking at the fund from a cost perspective, PASAX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Overall, PIMCO Allocation Asset A ( PASAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, PIMCO Allocation Asset A ( PASAX ) looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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