LBISX
BrandywineGLOBAL Dvrsf US LargeCp Val-IS
Strategic Focus on Undervalued Large-Cap Stocks
The BrandywineGLOBAL Dvrsf US LargeCp Val-IS (LBISX) fund is strategically designed to capture long-term growth by investing in undervalued large-cap companies. With a mandate to allocate at least 80% of its net assets to equity securities of large-cap firms, the fund seeks to identify stocks that are either undervalued or currently out of favor in the market. This approach aligns with the fund’s objective of growth, offering investors a chance to benefit from potential price corrections and market revaluations. The fund’s focus on large-cap value stocks makes it a compelling choice for investors looking to capitalize on market inefficiencies and gain exposure to established companies with strong fundamentals.
At A Glance
Executive Summary
LBISX offers undervalued large-cap equity exposure with a competitive 0.71% expense ratio, focusing on growth potential in out-of-favor stocks.
Focus on undervalued large-cap stocks Competitive expense ratio Strong 1-year performance
Negative alpha and Sharpe ratio High downside risk Limited sector diversification
Performance Metrics and Market Comparison
LBISX has demonstrated a robust performance over the past year, with a 1-year return of 36.53%, closely trailing its benchmark, the S&P 500 Total Return Index, which posted a 37.62% return. Despite this strong performance, the fund’s risk metrics reveal some areas of concern. The fund’s alpha is negative at -1.13%, indicating underperformance relative to its benchmark on a risk-adjusted basis. Additionally, the Sharpe ratio is -0.10, suggesting that the fund has not been able to generate returns commensurate with the risk taken. However, the fund’s beta of 0.78 indicates lower volatility compared to the market, which may appeal to risk-averse investors.
Sector Allocation and Diversification
The fund’s sector allocation is heavily weighted towards financials, which constitute 29.68% of the portfolio. This is followed by significant investments in healthcare (16.73%) and industrials (12.36%). Such a concentration in financials suggests a strategic bet on the sector’s potential for recovery and growth. However, this also implies a lack of diversification across other sectors, which could expose the fund to sector-specific risks. The fund’s minimal exposure to real estate and basic materials further highlights its focused investment strategy. Investors should consider whether this sector concentration aligns with their risk tolerance and investment goals.
Top Holdings and Investment Strategy
LBISX’s top holdings include major corporations such as JPMorgan Chase & Co, AbbVie Inc, and Johnson & Johnson, which together form a significant portion of the fund’s assets. These companies are well-established leaders in their respective industries, providing a stable foundation for the fund’s portfolio. The investment strategy of focusing on undervalued stocks is evident in these selections, as these companies have strong fundamentals and potential for price appreciation. The fund’s emphasis on large-cap stocks is further reflected in its market cap allocation, with 48.48% in large-cap and 12.58% in extra-large-cap stocks, ensuring a balance between growth potential and stability.
Risk Assessment and Drawdown Analysis
Investors should be aware of the fund’s risk profile, which includes a maximum drawdown of -5.5% over a short period, indicating potential vulnerability to market downturns. The fund’s downside risk, measured by the Ulcer Index, is 1.86, suggesting moderate exposure to losses during adverse market conditions. The negative Treynor ratio of -1.45 further highlights the challenges in achieving risk-adjusted returns. While the fund’s beta of 0.78 suggests lower market sensitivity, the negative alpha and Sharpe ratio indicate that the fund has struggled to outperform its benchmark on a risk-adjusted basis. These factors should be carefully considered by investors seeking to balance risk and return.
Competitive Expense Ratio and Yield
LBISX offers a competitive expense ratio of 0.71%, which is relatively low for a fund in the large-cap value category. This cost efficiency can enhance net returns for investors, making it an attractive option for those seeking to minimize expenses. Additionally, the fund provides a yield of 1.54%, offering a modest income stream alongside potential capital appreciation. This combination of low expenses and reasonable yield positions LBISX favorably against similar funds, such as MFS MA Investors Trust-A and CIBC Atlas Disciplined Equity-Inst, which have slightly lower yields and comparable expense ratios. Investors should weigh these factors when considering the fund’s overall value proposition.
Comparative Analysis with Similar Funds
When compared to similar funds like MFS MA Investors Trust-A (MITTX) and CIBC Atlas Disciplined Equity-Inst (AWEIX), LBISX stands out with its focus on undervalued large-cap stocks and a strong 1-year performance. While MITTX and AWEIX offer slightly lower expense ratios, LBISX’s strategic emphasis on growth through undervalued equities provides a unique investment angle. The fund’s beta of 0.78 is lower than its peers, indicating less volatility, which may appeal to conservative investors. However, the negative alpha and Sharpe ratio suggest that investors should carefully consider the fund’s risk-adjusted performance relative to its peers before making an investment decision.
Conclusion: Suitability for Growth-Oriented Investors
In conclusion, the BrandywineGLOBAL Dvrsf US LargeCp Val-IS (LBISX) fund offers a compelling opportunity for growth-oriented investors seeking exposure to undervalued large-cap stocks. With a competitive expense ratio and a focus on established companies with strong fundamentals, the fund is well-suited for those looking to capitalize on market inefficiencies. However, potential investors should be mindful of the fund’s risk metrics, including its negative alpha and Sharpe ratio, as well as its sector concentration in financials. Overall, LBISX is an attractive option for investors with a higher risk tolerance and a long-term investment horizon, aiming to benefit from potential market revaluations.
Similar Securities
MADVX: BlackRock Equity Dividend-Inst | High-Yield Large Cap Value Fund
MADVX offers a 2.34% yield with a focus on dividend-paying large-cap stocks, underperforming its benchmark but providing stable income.
PEYAX: Putnam LargeCap Value-A | Growth and Income Investment
PEYAX offers a balanced approach with a 1.20% yield and strong large-cap value focus, outperforming peers with a 35.95% 1-year return.
ACGIX: Invesco Growth & Income-A | Value-Focused Growth & Income Fund
ACGIX offers a strategic blend of income and growth with a focus on large-cap value stocks, featuring a competitive 0.79% expense ratio.
LBISX: BrandywineGLOBAL Dvrsf US LargeCp Val-IS | Undervalued Large-Cap Growth
LBISX offers undervalued large-cap equity exposure with a competitive 0.71% expense ratio, focusing on growth potential in out-of-favor stocks.
SAIFX: ClearBridge LargeCap Value-I | Growth and Income with Large-Cap Stability
SAIFX offers a balanced approach with a 0.59% expense ratio, focusing on large-cap value stocks for growth and income, outperforming peers in stability.
Futher Reading
https://www.morningstar.com/funds/xnas/LBISX/quote
https://finance.yahoo.com/quote/LBISX/”>Yahoo: BrandywineGLOBAL Dvrsf US LargeCp Val-IS
https://ftcloud.fasttrack.net/web/chart/LBISX
https://www.wsj.com/market-data/quotes/mutualfund/LBISX
Disclaimer: The information provided on this website is for informational purposes only and should not be construed as financial, investment, or other professional advice. PeepFinance does not endorse or recommend any specific securities, investments, or strategies. The opinions expressed are solely those of the authors and are not intended to be used as the basis for any investment decisions. All investments carry risks, and readers are encouraged to conduct their own research or consult with a financial professional before making any financial decisions. PeepFinance and its authors are not responsible for any losses or damages arising from the use of this information.