Is American Funds Capital Income Builder A (CAIBX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Large Cap Blend fund? Starting with American Funds Capital Income Builder A (CAIBX) is one possibility. CAIBX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveCAIBX is part of the Large Cap Blend section, an area that boasts an array of many possible options. Large Cap Blend mutual funds most often invest in firms with a market capitalization of $10 billion or more. By investing in bigger companies, these funds offer more stability, and are often well-suited for investors with a 'buy and hold' mindset. Blended funds mix large, established companies into their holdings, which gives investors exposure to both value and growth at the same time.History of Fund/ManagerCAIBX is a part of the American Funds family of funds, a company based out of Los Angeles, CA. The American Funds Capital Income Builder A made its debut in July of 1987 and CAIBX has managed to accumulate roughly $62.73 billion in assets, as of the most recently available information. A team of investment professionals is the fund's current manager.PerformanceOf course, investors look for strong performance in funds. CAIBX has a 5-year annualized total return of 9.27%, 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 12.23%, 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. Compared to the category average of 13.73%, the standard deviation of CAIBX over the past three years is 10.98%. The fund's standard deviation over the past 5 years is 11.22% compared to the category average of 13.25%. This makes the fund less volatile than its peers over the past half-decade.Risk FactorsInvestors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. CAIBX has a 5-year beta of 0.61, which means it is likely to be less volatile than the market average. 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. CAIBX's 5-year performance has produced a negative alpha of -0.78, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesFor 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, CAIBX is a load fund. It has an expense ratio of 0.59% compared to the category average of 0.93%. CAIBX is actually cheaper than its peers when you consider factors like cost.This fund requires a minimum initial investment of $250, and each subsequent investment should be at least $50.Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.Bottom LineOverall, American Funds Capital Income Builder A ( CAIBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.This could just be the start of your research on CAIBX in the Large Cap Blend category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.Radical New Technology Could Hand Investors Huge GainsQuantum Computing is the next technological revolution, and it could be even more advanced than AI.While some believed the technology was years away, it is already present and moving fast. 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Click to get this free report Get Your Free (CAIBX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks