If you have been looking for Large Cap Value funds, a place to start could be JPMorgan Large Cap Value Fund A (OLVAX). OLVAX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Large Cap Value mutual funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value; this value investing strategy often leads to low P/E ratios and high dividend yields, though growth levels are often curtailed. The high-growth opportunity of these funds are slowed even further, as large-cap securities are generally in stable industries with low to moderate growth prospects. Therefore, Large Cap Value funds are usually more appealing to investors who are interested in a stable income stream.
History of Fund/Manager
J.P. Morgan is based in Boston, MA, and is the manager of OLVAX. Since JPMorgan Large Cap Value Fund A made its debut in February of 1992, OLVAX has garnered more than $224.94 million in assets. Scott Blasdell is the fund's current manager and has held that role since April of 2013.
Investors naturally seek funds with strong performance. OLVAX has a 5-year annualized total return of 12.41% 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 14.97%, 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, OLVAX's standard deviation comes in at 12.01%, compared to the category average of 9.02%. The fund's standard deviation over the past 5 years is 11.4% compared to the category average of 8.78%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In the most recent bear market, OLVAX lost 54.14% and outperformed its peer group by 3.83%. This might suggest that the fund is a better choice than its peers during a bear market.
Investors should note that the fund has a 5-year beta of 1.02, so it is likely going to be as volatile as 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. The fund has produced a negative alpha over the past 5 years of -1.42, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Exploring 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 largely on equities that are traded in the United States.
As of the last filing date, the mutual fund has 78.93% of its assets in stocks, with an average market capitalization of $69.78 billion. Turnover is 130%, which means this fund makes more trades in a given year than the category average.
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, OLVAX is a load fund. It has an expense ratio of 0.93% compared to the category average of 1.03%. So, OLVAX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.
Overall, JPMorgan Large Cap Value Fund A ( OLVAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Large Cap Value segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.