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Is AMG Yacktman I (YACKX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

If you have been looking for All Cap Value funds, a place to start could be AMG Yacktman I (YACKX). YACKX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes YACKX as All Cap Value, which is a segment packed with options. All Cap Value mutual funds, as the name suggests, invest across the cap spectrum in small-cap, mid-cap, and large-cap companies. However, in practice, these funds generally end up focusing on larger companies thanks to their percentage of assets. Regardless, these funds look for value positions, targeting firms whose share prices do not reflect their full worth, as well as low P/E Ratios and high dividend yields.

History of Fund/Manager

AMG Funds is based in Norwalk, CT, and is the manager of YACKX. AMG Yacktman I debuted in July of 1992. Since then, YACKX has accumulated assets of about $8.24 billion, according to the most recently available information. The fund is currently managed by Stephen Yacktman who has been in charge of the fund since December of 2002.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 6.52%, and it sits 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 5.94%, 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. YACKX's standard deviation over the past three years is 13.68% compared to the category average of 16.96%. Looking at the past 5 years, the fund's standard deviation is 11.93% compared to the category average of 15.16%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 0.74, so investors should note that it is hypothetically less 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. With a negative alpha of -1.01, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 primarily on equities that are traded in the United States.

Currently, this mutual fund is holding 87.85% stock in stocks, which have an average market capitalization of $207.86 billion. The fund has the heaviest exposure to the following market sectors:

  1. Other
  2. Non-Durable
  3. Technology
  4. Finance

With turnover at about 35%, this fund is making fewer trades than the average comparable fund.

Expenses

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, YACKX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.06%. YACKX is actually cheaper than its peers when you consider factors like cost.

Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $100.

Bottom Line

Overall, AMG Yacktman I ( YACKX ) 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.

Don't stop here for your research on All Cap Value funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare YACKX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.


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