Is The Income Fund of America (AMECX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Large Cap Value category, but where should you start your research? Well, one fund that might be worth investigating is The Income Fund of America (AMECX). AMECX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveAMECX 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/ManagerAMECX finds itself in the American Funds family, based out of Los Angeles, CA. The Income Fund of America debuted in December of 1970. Since then, AMECX has accumulated assets of about $77.53 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.PerformanceInvestors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 7.48%, 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 5.04%, 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 AMECX over the past three years is 11.62% compared to the category average of 14.29%. The standard deviation of the fund over the past 5 years is 12.27% compared to the category average of 15.13%. This makes the fund less volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 0.62, which means it is hypothetically less volatile than the market at large. 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. Over the past 5 years, the fund has a negative alpha of -2.74. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesFor 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, AMECX is a load fund. It has an expense ratio of 0.58% compared to the category average of 0.94%. So, AMECX is actually cheaper than its peers from a cost perspective.Investors need to be aware that with this product, the minimum initial investment is $250; each subsequent investment needs to be at least $50.Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.Bottom LineOverall, The Income Fund of America ( AMECX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a great potential choice for investors right now.Want even more information about AMECX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.Free Today: Profiting from The Future’s Brightest Energy SourceThe demand for electricity is growing exponentially. At the same time, we’re working to reduce our dependence on fossil fuels like oil and natural gas. Nuclear energy is an ideal replacement.Leaders from the US and 21 other countries recently committed to TRIPLING the world’s nuclear energy capacities. This aggressive transition could mean tremendous profits for nuclear-related stocks – and investors who get in on the action early enough.Our urgent report, Atomic Opportunity: Nuclear Energy's Comeback, explores the key players and technologies driving this opportunity, including 3 standout stocks poised to benefit the most.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (AMECX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks