Is Invesco Comstock A (ACSTX) a Strong Mutual Fund Pick Right Now?
If you have been looking for Large Cap Value funds, it would not be wise to start your search with Invesco Comstock A (ACSTX). ACSTX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
ACSTX 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
Invesco is based in Kansas City, MO, and is the manager of ACSTX. Invesco Comstock A made its debut in October of 1968, and since then, ACSTX has accumulated about $5.86 billion in assets, per the most up-to-date date available. The fund's current manager is 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 11.88%, and it sits 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 8.73%, which places it in the bottom 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 ACSTX over the past three years is 24.32% compared to the category average of 15.87%. Looking at the past 5 years, the fund's standard deviation is 19.75% compared to the category average of 13.08%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.18, so investors should note that it is hypothetically more volatile than 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. With a negative alpha of -6.21, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 principally on equities that are traded in the United States.
As of the last filing date, the mutual fund has 91.16% of its assets in stocks, with an average market capitalization of $137.93 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Non-Durable
Technology
Industrial Cyclical
With turnover at about 19%, this fund is making fewer trades than comparable funds.
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, ACSTX is a load fund. It has an expense ratio of 0.82% compared to the category average of 1%. ACSTX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.
Bottom Line
Overall, Invesco Comstock A ( ACSTX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, Invesco Comstock A ( ACSTX ) looks like a somewhat weak 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 ACSTX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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