Looking for a Large Cap Value fund? You may want to consider Dodge & Cox Stock Fund (DODGX) as a possible option. DODGX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
DODGX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream fund these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds'high growth opportunity are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.
History of Fund/Manager
Dodge & Cox is based in Boston, MA, and is the manager of DODGX. Dodge & Cox Stock Fund debuted in December of 1964. Since then, DODGX has accumulated assets of about $63.01 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 8.91%, and is 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 13.25%, 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 11.9%, the standard deviation of DODGX over the past three years is 13.61%. Over the past 5 years, the standard deviation of the fund is 13.72% compared to the category average of 11.87%. 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. In the most recent bear market, DODGX lost 57.95% and underperformed comparable funds by 7%. 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 1.07, which means it is hypothetically more 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. DODGX's 5-year performance has produced a negative alpha of -2.68, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 92.61% of its assets in stocks, and these companies have an average market capitalization of $146.65 billion. The fund has the heaviest exposure to the following market sectors:
- Industrial Cyclical
With turnover at about 20%, this fund makes fewer trades than comparable funds.
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, DODGX is a no load fund. It has an expense ratio of 0.52% compared to the category average of 0.99%. From a cost perspective, DODGX is actually cheaper than its peers.
This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.
Overall, Dodge & Cox Stock Fund ( DODGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Dodge & Cox Stock Fund ( DODGX ) looks like a somewhat average choice for investors right now.
For additional information on the Large Cap Value area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into DODGX too 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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