If investors are looking at the Large Cap Growth fund category, make sure to pass over BFS Equity (BFSAX). BFSAX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
We classify BFSAX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
BFS Funds is responsible for BFSAX, and the company is based out of Indianapolis, IN. The BFS Equity made its debut in November of 2013 and BFSAX has managed to accumulate roughly $35.96 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. BFSAX has a 5-year annualized total return of 9.98% and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 15.24%, 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 the fund over the past 5 years is 12.18% compared to the category average of 1.08%. 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.
Even still, the fund has a 5-year beta of 1, so investors should note that it is hypothetically 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. With a negative alpha of -0.69, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, BFSAX is a no load fund and it has an expense ratio of 1.25%.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment has no minimum amount.
With a ‘strong sell’ rank, BFS Equity is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Large Cap Growth right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in BFSAX turnaround in the next data release.
Your research on the Large Cap Growth 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. 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.