Large Cap Value fund seekers should consider taking a look at BlackRock Equity Dividend R (MRDVX – Free Report) . MRDVX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
MRDVX is one of many Large Cap Value mutual funds to choose from. These funds invest in equities with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This strategy can often produce low P/E ratios and high dividend yields; growth levels; however, growth levels are oftentimes cut back. These funds’high growth opportunities are slowed even more since large-cap stocks are usually in more stable industries with low to moderate growth prospects. Thus, investors interested in a stable income stream fund Large Cap Value funds very appealing.
History of Fund/Manager
MRDVX is a part of the BlackRock family of funds, a company based out of New York, NY. Since BlackRock Equity Dividend R made its debut in January of 2003, MRDVX has garnered more than $756.75 million in assets. The fund’s current manager is a team of investment professionals.
Obviously, 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 11.43%, 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 14.16%, which places it in the top 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. Over the past three years, MRDVX’s standard deviation comes in at 9.64%, compared to the category average of 8.97%. The standard deviation of the fund over the past 5 years is 9.64% compared to the category average of 8.74%. This makes the fund more volatile than its peers over the past half-decade.
It’s always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In MRDVX’s case, the fund lost 46.42% in the most recent bear market and underperformed comparable funds by 3.89%. This means that the fund could possibly be a worse choice than its peers during a down market environment.
Investors should note that the fund has a 5-year beta of 0.95, so it is likely going to be less 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. MRDVX has generated a negative alpha over the past five years of -2.03, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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 largely on equities that are traded in the United States.
This fund is currently holding about 86.96% stock in stocks, with an average market capitalization of $137.35 billion. The fund has the heaviest exposure to the following market sectors:
This fund’s turnover is about 44%, so the fund managers are making fewer trades than its comparable peers.
For 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, MRDVX is a no load fund. It has an expense ratio of 1.25% compared to the category average of 1.03%. So, MRDVX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $100, investors should also note that there is no minimum for each subsequent investment.
Overall, BlackRock Equity Dividend R ( MRDVX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, this fund looks like a good potential choice for investors right now.
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