If you have been looking for Large Cap Growth funds, it would not be wise to start your search with BlackRock Exchange BlackRock (STSEX). STSEX has a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify STSEX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
BlackRock is based in New York, NY, and is the manager of STSEX. The BlackRock Exchange BlackRock made its debut in May of 1986 and STSEX has managed to accumulate roughly $261.64 million in assets, as of the most recently available information. The fund’s current manager, Phil Ruvinsky, has been in charge of the fund since February of 2020.
Performance
Investors naturally seek funds with strong performance. STSEX has a 5-year annualized total return of 15.28% and is 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 13.01%, which places it in the top 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 STSEX over the past three years is 15.06% compared to the category average of 17.44%. The fund’s standard deviation over the past 5 years is 15.4% compared to the category average of 18.32%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. STSEX has a 5-year beta of 0.8, 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. STSEX’s 5-year performance has produced a positive alpha of 2.59, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Expenses
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, STSEX is a no load fund. It has an expense ratio of 0.77% compared to the category average of 0.76%. So, STSEX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively strong performance, average downside risk, and higher fees, BlackRock Exchange BlackRock ( STSEX ) has a low Zacks Mutual Fund rank, and therefore looks a poor potential choice for investors right now.
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