Is Diamond Hill Large Cap Fund A (DHLAX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Mutual Fund Equity Report fund? Diamond Hill Large Cap Fund A (DHLAX) is a potential starting point. DHLAX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
DHLAX finds itself in the Diamond Hill family, based out of Columbus, OH. Diamond Hill Large Cap Fund A made its debut in July of 2001, and since then, DHLAX has accumulated about $767 million in assets, per the most up-to-date date available. Charles Bath is the fund's current manager and has held that role since October of 2002.
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 6.39%, and is in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.17%, which places it in the bottom third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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. DHLAX's standard deviation over the past three years is 18.54% compared to the category average of 15.49%. The fund's standard deviation over the past 5 years is 20.47% compared to the category average of 16.69%. This makes the fund more 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. DHLAX has a 5-year beta of 1.02, which means it is likely to be as volatile as the market average. 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. DHLAX's 5-year performance has produced a negative alpha of -3.14, which means 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.
Currently, this mutual fund is holding 83.42% in stocks and it has 2.63% of assets in foreign securities. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
Health
Turnover is about 26%, so those in charge of the fund make fewer trades than comparable funds.
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, DHLAX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 0.91%. Looking at the fund from a cost perspective, DHLAX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and higher fees, Diamond Hill Large Cap Fund A ( DHLAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report 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 DHLAX to its peers 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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