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There are plenty of choices in the Large Cap Growth category, but where should you start your research? Well, one fund that you should consider investigating is Wells Fargo Omega Growth A (EKOAX). EKOAX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
EKOAX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.
History of Fund/Manager
EKOAX finds itself in the Wells Fargo family, based out of San Francisco, CA. Since Wells Fargo Omega Growth A made its debut in April of 1968, EKOAX has garnered more than $1.05 billion in assets. Michael Smith is the fund's current manager and has held that role since May of 2010.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. EKOAX has a 5-year annualized total return of 25.8% and is in the top 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 29.35%, 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 16.18%, the standard deviation of EKOAX over the past three years is 20.12%. The fund's standard deviation over the past 5 years is 17.32% compared to the category average of 13.35%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. EKOAX has a 5-year beta of 1.04, which means it is likely to be more volatile than the market average. 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. EKOAX's 5-year performance has produced a positive alpha of 5.35, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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 largely on equities that are traded in the United States.
Right now, 80.84% of this mutual fund's holdings are stocks, with an average market capitalization of $473.70 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 25.22%, 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, EKOAX is a load fund. It has an expense ratio of 1.28% compared to the category average of 1.02%. EKOAX is actually more expensive 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 $100.
Overall, Wells Fargo Omega Growth A ( EKOAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Wells Fargo Omega Growth A ( EKOAX ) looks like a somewhat average choice for investors right now.
Want even more information about EKOAX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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