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Is ICON Energy S (ICENX) a Strong Mutual Fund Pick Right Now?

Zacks Equity Research

If you've been stuck searching for Sector - Energy funds, you might want to consider passing on by ICON Energy S (ICENX) as a possibility. ICENX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes ICENX as Sector - Energy, a segment packed with options. Sector - Energy mutual funds encompass a wide range of vastly changing and vitally important industries throughout this massive global sector. Oil and gas comprise the bulk of the exposure here, and carbon-based fuels are going to be the majority of assets in these funds. However, clean energy is starting to pick up steam.

History of Fund/Manager

ICENX finds itself in the ICON Funds family, based out of Greenwood Village, CO. The ICON Energy S made its debut in November of 1997 and ICENX has managed to accumulate roughly $95 million in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -11.3%, and is in the middle third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of -9.02%, which places it in the middle 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. ICENX's standard deviation over the past three years is 22.65% compared to the category average of 13.17%. Over the past 5 years, the standard deviation of the fund is 22.33% compared to the category average of 13.86%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

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, ICENX lost 42.42% and outperformed its peer group by 13%. This might suggest that the fund is a better choice than its peers during a bear market.

Even still, the fund has a 5-year beta of 1.16, so investors should note that 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. ICENX has generated a negative alpha over the past five years of -19.96, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

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, ICENX is a no load fund. It has an expense ratio of 1.50% compared to the category average of 1.62%. ICENX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, ICON Energy S ( ICENX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, ICON Energy S ( ICENX ) looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Sector - Energy 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 ICENX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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