Any investors hoping to find an Allocation Balanced fund could think about starting with Columbia Global Strategic Equity A (NLGIX). NLGIX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
NLGIX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Columbia is responsible for NLGIX, and the company is based out of Boston, MA. Columbia Global Strategic Equity A debuted in October of 1996. Since then, NLGIX has accumulated assets of about $531.32 million, according to the most recently available information. The fund is currently managed by Mark Burgess who has been in charge of the fund since June of 2015.
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 3.36%, and is in the middle 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 9.6%, 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. The standard deviation of NLGIX over the past three years is 12.01% compared to the category average of 9.32%. Looking at the past 5 years, the fund's standard deviation is 13.46% compared to the category average of 9.49%. 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. NLGIX lost 51.17% in the most recent bear market and underperformed comparable funds by 15%. This could mean that the fund is a worse choice than comparable funds during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.99, which means 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. The fund has produced a negative alpha over the past 5 years of -5.9, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, NLGIX is a load fund. It has an expense ratio of 0.50% compared to the category average of 0.92%. NLGIX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $2,000, investors should also note that there is no minimum for each subsequent investment.
Overall, Columbia Global Strategic Equity A ( NLGIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Allocation Balanced, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
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