Have you been searching for a Large Cap Value fund? You might want to begin with TIAA-CREF Large Cap Value Premier (TRCPX). TRCPX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
Objective
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
TIAA-CREF is based in Boston, MA, and is the manager of TRCPX. TIAA-CREF Large Cap Value Premier made its debut in September of 2009, and since then, TRCPX has accumulated about $83.74 million in assets, per the most up-to-date date available. Charles Carr is the fund’s current manager and has held that role since November of 2018.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 4.43%, and is in the middle 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 -0.1%, which places it in the bottom 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, TRCPX’s standard deviation comes in at 18.8%, compared to the category average of 15%. Over the past 5 years, the standard deviation of the fund is 15.97% compared to the category average of 12.81%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.05, so investors should note that it is hypothetically more volatile than 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. The fund has produced a negative alpha over the past 5 years of -6.84, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
As of the last filing date, the mutual fund has 98.47% of its assets in stocks, with an average market capitalization of $163.27 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Technology
- Industrial Cyclical
- Health
- Non-Durable
With turnover at about 16%, this fund is making more trades in a given year than the category average.
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, TRCPX is a no load fund. It has an expense ratio of 0.55% compared to the category average of 0.99%. So, TRCPX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, TIAA-CREF Large Cap Value Premier ( TRCPX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, TIAA-CREF Large Cap Value Premier ( TRCPX ) looks like a somewhat average choice for investors right now.
This could just be the start of your research on TRCPXin the Large Cap Value category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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