If you have been looking for Mutual Fund Equity Report funds, a place to start could be American Funds Balanced R3 (RLBCX). RLBCX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Funds is based in Los Angeles, CA, and is the manager of RLBCX. Since American Funds Balanced R3 made its debut in July of 1975, RLBCX has garnered more than $2.36 billion in assets. The fund’s current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. RLBCX has a 5-year annualized total return of 5.76% and it sits 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 5.58%, which places it in the middle 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. Compared to the category average of 14.33%, the standard deviation of RLBCX over the past three years is 11.74%. Looking at the past 5 years, the fund’s standard deviation is 11.6% compared to the category average of 15.06%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.61, which means it is hypothetically less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio’s performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. RLBCX has generated a negative alpha over the past five years of -1.69, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
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, RLBCX is a no load fund. It has an expense ratio of 0.90% compared to the category average of 0.85%. From a cost perspective, RLBCX is actually more expensive than its peers.
Investors should also note that the minimum initial investment for the product is $250 and that each subsequent investment needs to be at $50
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, American Funds Balanced R3 ( RLBCX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, American Funds Balanced R3 ( RLBCX ) looks like a good potential choice for investors right now.
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