There are plenty of choices in the Allocation Balanced category, but where should you start your research? Well, one fund that may not be worth investigating is Pioneer Flexible Opportunities A (PMARX). PMARX holds a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Zacks' Allocation Balanced funds is an area filled with options, such as PMARX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Pioneer Invstestments is based in Canton, MA, and is the manager of PMARX. Pioneer Flexible Opportunities A debuted in May of 2010. Since then, PMARX has accumulated assets of about $107.79 million, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. PMARX has a 5-year annualized total return of 4.32% and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 8.67%, which places it in the middle 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 5 years, the standard deviation of the fund is 10.12% compared to the category average of 0.88%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment.
Investors should note that the fund has a 5-year beta of 0.7, 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. With a negative alpha of -3.12, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, PMARX is a load fund and it has an expense ratio of 1.14%.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
With a 'strong sell' rank, Pioneer Flexible Opportunities A is in the bottom 20% of all the mutual funds we cover. This means that our models suggest it is one of the worst options for investors in Allocation Balanced right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in PMARX turnaround in the next data release.
For additional information on the Allocation Balanced area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into PMARX too 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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Zacks Investment Research