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Is Loomis Sayles Growth Fund A (LGRRX) a Strong Mutual Fund Pick Right Now?

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If you've been stuck searching for Large Cap Growth funds, consider Loomis Sayles Growth Fund A (LGRRX - Free Report) as a possibility. LGRRX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

LGRRX is classified in the Large Cap Growth segment by Zacks, an area full of possibilities. Companies are usually considered to be large-cap if their stock market valuation is more than $10 billion. Large Cap Growth mutual funds invest in many large U.S. firms that are projected to grow at a faster rate than their large-cap peers.

History of Fund/Manager

LGRRX finds itself in the Natixis Funds family, based out of Kansas City, MO. Loomis Sayles Growth Fund A made its debut in May of 1991, and since then, LGRRX has accumulated about $1.26 billion in assets, per the most up-to-date date available. Aziz Hamzaogullari is the fund's current manager and has held that role since May of 2010.

Performance

Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 14.61%, 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 28.92%, which places it in the top 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 LGRRX over the past three years is 19.58% compared to the category average of 15.37%. The fund's standard deviation over the past 5 years is 19.78% compared to the category average of 15.06%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 1.15, which means 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. The fund has produced a negative alpha over the past 5 years of -1.25, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Examining 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.

Currently, this mutual fund is holding 89.34% in stocks, which have an average market capitalization of $634.01 billion. The fund has the heaviest exposure to the following market sectors:

  • Technology
  • Non-Durable
  • Retail Trade

Turnover is 6%, which means, on average, the fund makes fewer trades than the average comparable fund.

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, LGRRX is a load fund. It has an expense ratio of 0.90% compared to the category average of 0.94%. From a cost perspective, LGRRX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, while there is no minimum for each subsequent investment.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Loomis Sayles Growth Fund A ( LGRRX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Loomis Sayles Growth Fund A ( LGRRX ) looks like a good potential choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.


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