Any investors hoping to find a Sector – Real Estate fund might consider looking past TETON Convertible Securities AAA (WESRX). WESRX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
Zacks categorizes WESRX in Sector – Real Estate, which is a segment packed with options. Real estate investment trusts (REITs) are a popular income vehicle thanks their taxation rules, and Sector – Real Estate mutual funds typically invest in them. A REIT is required to pay out at least 90% of its income annually to avoid double taxation, and this technique makes securities in these funds high dividend players–almost bond-like in some cases–though their risk is similar to equities.
TETON is based in Rye, NY, and is the manager of WESRX. Since TETON Convertible Securities AAA made its debut in September of 1997, WESRX has garnered more than $3.30 million in assets. James Dinsmore is the fund’s current manager and has held that role since October of 2016.
Of course, investors look for strong performance in funds. WESRX has a 5-year annualized total return of 5.12% and is in the bottom third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3 -year annualized total return of -1.1%, which places it in the bottom 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. Over the past three years, WESRX’s standard deviation comes in at 14.66%, compared to the category average of 13.64%. The standard deviation of the fund over the past 5 years is 15.51% compared to the category average of 14.97%. This makes the fund more volatile than its peers over the past half-decade.
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. WESRX has a 5-year beta of 0.72, 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. WESRX’s 5-year performance has produced a negative alpha of -6.02, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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