Is American Century Income & Growth Investor (BIGRX) a Strong Mutual Fund Pick Right Now?
Large Cap Blend fund seekers should consider taking a look at American Century Income & Growth Investor (BIGRX). BIGRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that BIGRX is a Large Cap Blend option, an area loaded with different options. More often than not, Large Cap Blend mutual funds invest in companies with a market cap of over $10 billion. Buying stakes in bigger companies offer these funds more stability, and are well-suited for investors with a " buy and hold " mindset. Additionally, blended funds mix large, more established firms into their portfolios, giving investors exposure to value and growth opportunities.
History of Fund/Manager
American Century is based in Kansas City, MO, and is the manager of BIGRX. American Century Income & Growth Investor debuted in December of 1990. Since then, BIGRX has accumulated assets of about $2.05 billion, according to the most recently available information. Steven Rossi is the fund's current manager and has held that role since April of 2020.
Performance
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 13.33%, 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 11.52%, 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. Compared to the category average of 15.87%, the standard deviation of BIGRX over the past three years is 18.62%. The standard deviation of the fund over the past 5 years is 15.11% compared to the category average of 13.08%. 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 0.97, so it is likely going to be as volatile as 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. BIGRX has generated a negative alpha over the past five years of -2.58, demonstrating that managers in this portfolio find it difficult to pick 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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 78.74% of its assets in stocks, which have an average market capitalization of $160.22 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
With turnover at about 240%, this fund makes more traders than comparable funds in a given year.
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, BIGRX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 0.95%. So, BIGRX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $2,500; each subsequent investment needs to be at least $50.
Bottom Line
Overall, American Century Income & Growth Investor ( BIGRX ) 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 Blend 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. 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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