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Is AMG Yacktman I (YACKX) a Strong Mutual Fund Pick Right Now?

Having trouble finding an All Cap Value fund? Well, AMG Yacktman I (YACKX) would not be a good potential starting point right now. YACKX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

YACKX is one of many All Cap Value funds to choose from. All Cap Value mutual funds buy stakes in companies in all three valuation categories: small, medium, and large-cap. However, they end up focusing on bigger firms due to percentage of assets. Most importantly, these funds look for key value characteristics, targeting stocks that boast low P/E ratios, high dividend yields, and whose share prices do not reflect their worth.

History of Fund/Manager

AMG Funds is based in Norwalk, CT, and is the manager of YACKX. The AMG Yacktman I made its debut in July of 1992 and YACKX has managed to accumulate roughly $7.11 billion in assets, as of the most recently available information. The fund's current manager, Stephen Yacktman, has been in charge of the fund since December of 2002.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 7.73%, and it sits in the top 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 10.79%, 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. The standard deviation of YACKX over the past three years is 7.23% compared to the category average of 11.13%. The fund's standard deviation over the past 5 years is 8.59% compared to the category average of 11.6%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In YACKX's case, the fund lost 40.99% in the most recent bear market and outperformed its peer group by 8.39%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.65, which means it is hypothetically 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. YACKX's 5-year performance has produced a positive alpha of 1.12, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

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, YACKX is a no load fund. It has an expense ratio of 0.70% compared to the category average of 1.12%. YACKX is actually cheaper than its peers when you consider factors like cost.

This fund requires a minimum initial investment of $100,000, and each subsequent investment should be at least $100.

Bottom Line

Overall, AMG Yacktman I ( YACKX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.

This could just be the start of your research on YACKXin the All Cap Value 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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