Is Loomis Sayles Growth Fund A (LGRRX) a Strong Mutual Fund Pick Right Now?
On the lookout for a Large Cap Growth fund? Starting with Loomis Sayles Growth Fund A (LGRRX) is one possibility. LGRRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
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
LGRRX finds itself in the Natixis Funds family, based out of Kansas City, MO. Since Loomis Sayles Growth Fund A made its debut in May of 1991, LGRRX has garnered more than $1.06 billion in assets. The fund's current manager, Aziz Hamzaogullari, has been in charge of the fund since May of 2010.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 16.83%, 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 12.41%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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, LGRRX's standard deviation comes in at 22.13%, compared to the category average of 15.92%. Looking at the past 5 years, the fund's standard deviation is 20.48% compared to the category average of 16.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.04, so it is likely going to be more volatile than the market at large. 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. Over the past 5 years, the fund has a positive alpha of 1.71. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
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 mostly on equities that are traded in the United States.
Right now, 80.1% of this mutual fund's holdings are stocks, with an average market capitalization of $425.26 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Non-Durable
This fund's turnover is about 13%, so the fund managers are making fewer trades than comparable funds.
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, LGRRX is a load fund. It has an expense ratio of 0.92% compared to the category average of 0.96%. Looking at the fund from a cost perspective, LGRRX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
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.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds 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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