If investors are looking at the Sector - Utilities fund category, make sure to pass over AllianzGI Global Water A (AWTAX). AWTAX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify AWTAX in the Sector - Utilities category, an area that is rife with possible choices. Sector - Utilities funds focus their investments on firms that provide essential daily services to millions of people like electric power, gas distribution, and water supply. All in all, the utility industry is a perfect fit for those investors looking for stability and low volatility.
History of Fund/Manager
Allianz (DE:ALVG) is responsible for AWTAX, and the company is based out of Stamford, CT. The AllianzGI Global Water A made its debut in April of 2008 and AWTAX has managed to accumulate roughly $172.37 million in assets, as of the most recently available information. The fund is currently managed by Andreas Fruschki who has been in charge of the fund since April of 2008.
Performance
Of course, investors look for strong performance in funds. AWTAX has a 5-year annualized total return of 2.16% and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 3.93%, 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 5 years, the standard deviation of the fund is 11.2% compared to the category average of 1.21%. This makes the fund more 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.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. AWTAX has a 5-year beta of 0.82, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. With a negative alpha of -4.43, managers in this portfolio find it difficult to pick 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, AWTAX is a load fund and it has an expense ratio of 1.19%.
Investors need to be aware that with this product, the minimum initial investment is $1,000; each subsequent investment needs to be at least $50.
Bottom Line
With a 'strong sell' rank, AllianzGI Global Water 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 Sector - Utilities right now, though this could change if the performance of the fund and the Zacks Ranks of the equities in AWTAX turnaround in the next data release.
For additional information on the Sector - Utilities 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 AWTAX 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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