If you have been looking for Large Cap Blend fund category, a potential starting could be State Farm Growth Fund (STFGX). STFGX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
STFGX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
State Farm is responsible for STFGX, and the company is based out of Bloomington, IL. Since State Farm Growth Fund made its debut in March of 1975, STFGX has garnered more than $8.10 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. STFGX has a 5-year annualized total return of 14.54% 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 9.85%, which places it in the bottom 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. The standard deviation of STFGX over the past three years is 15.96% compared to the category average of 16.41%. Over the past 5 years, the standard deviation of the fund is 15.52% compared to the category average of 16.21%. 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 0.94, so it is likely going to be 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. With a negative alpha of -0.24, 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 mostly on equities that are traded in the United States.
Currently, this mutual fund is holding 77.17% in stocks, which have an average market capitalization of $402.58 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 18%, this fund makes fewer trades than comparable funds.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, STFGX is a no load fund. It has an expense ratio of 0.12% compared to the category average of 0.72%. STFGX is actually cheaper than its peers when you consider factors like cost.
Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, State Farm Growth Fund ( STFGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, State Farm Growth Fund ( STFGX ) looks like a somewhat average choice for investors right now.
Want even more information about STFGX? 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. 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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This article originally published on Zacks Investment Research (zacks.com).
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