Is BlackRock Exchange BlackRock (STSEX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is BlackRock Exchange BlackRock (STSEX). STSEX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
BlackRock is based in New York, NY, and is the manager of STSEX. Since BlackRock Exchange BlackRock made its debut in May of 1986, STSEX has garnered more than $190.67 million in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 11.62%, and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 11.68%, 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 18.38%, the standard deviation of STSEX over the past three years is 16.01%. The fund's standard deviation over the past 5 years is 15.06% compared to the category average of 16.73%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. STSEX has a 5-year beta of 0.84, which means it is likely to be less volatile than the market average. 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. STSEX's 5-year performance has produced a positive alpha of 1.79, which means managers in this portfolio are skilled in picking 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.
Currently, this mutual fund is holding 88.7% stock in stocks, which have an average market capitalization of $1.01 trillion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Health
Turnover is 0%, which means, on average, the fund makes fewer trades than its comparable peers.
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, STSEX is a no load fund. It has an expense ratio of 0.81% compared to the category average of 1%. From a cost perspective, STSEX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, BlackRock Exchange BlackRock ( STSEX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, BlackRock Exchange BlackRock ( STSEX ) looks like a somewhat weak choice for investors right now.
This could just be the start of your research on STSEXin the Mutual Fund Equity Report 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. 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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