Is Invesco Diversified Dividend A (LCEAX) a Strong Mutual Fund Pick Right Now?

Any investors hoping to find a Large Cap Blend fund could think about starting with Invesco Diversified Dividend A (LCEAX). LCEAX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.ObjectiveLCEAX 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/ManagerInvesco is responsible for LCEAX, and the company is based out of Kansas City, MO. Invesco Diversified Dividend A made its debut in December of 2001, and since then, LCEAX has accumulated about $3.91 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.PerformanceObviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.9%, 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 11.62%, 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. The standard deviation of LCEAX over the past three years is 11.93% compared to the category average of 12.19%. Over the past 5 years, the standard deviation of the fund is 14.04% compared to the category average of 13.56%. This makes the fund more 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. LCEAX has a 5-year beta of 0.77, 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. Over the past 5 years, the fund has a negative alpha of -0.96. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsExploring 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.Right now, 75.22% of this mutual fund's holdings are stocks, with an average market capitalization of $318.27 billion. The fund has the heaviest exposure to the following market sectors:FinanceIndustrial CyclicalTechnologyNon-DurableWith turnover at about 64%, this fund is making more traders than comparable funds in a given year.ExpensesCosts 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, LCEAX is a load fund. It has an expense ratio of 0.83% compared to the category average of 0.95%. LCEAX is actually cheaper than its peers when you consider factors like cost.This fund requires a minimum initial investment of $1,000, 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, even with its comparatively weak performance, average downside risk, and lower fees, Invesco Diversified Dividend A ( LCEAX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.For additional information on this product, or to compare it to other mutual funds in the Large Cap Blend, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (LCEAX): 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