Is American Growth Fund Series Two E (AMREX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is American Growth Fund Series Two E (AMREX). AMREX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
American Growth is based in Denver, CO, and is the manager of AMREX. The American Growth Fund Series Two E made its debut in February of 2011 and AMREX has managed to accumulate roughly $1.75 million in assets, as of the most recently available information. The fund's current manager, Timothy Taggart, has been in charge of the fund since April of 2011.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of -8.59%, and is in the bottom 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 -3.54%, 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 AMREX over the past three years is 32.11% compared to the category average of 24.73%. The fund's standard deviation over the past 5 years is 30.41% compared to the category average of 20.86%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.94, so investors should note that it is hypothetically less 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. The fund has produced a negative alpha over the past 5 years of -19.83, which shows 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, AMREX is a load fund. It has an expense ratio of 0% compared to the category average of 1.01%. So, AMREX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, American Growth Fund Series Two E ( AMREX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and lower fees, American Growth Fund Series Two E ( AMREX ) looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Mutual Fund Equity Report 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 AMREX to its peers as well 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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