If investors are looking at the Allocation Balanced fund category, make sure to pass over Pioneer Equity Premium Income A (PMARX). PMARX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
PMARX is one of many Zacks’ Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
PMARX finds itself in the Victory family, based out of Columbus, OH. Pioneer Equity Premium Income A debuted in May of 2010. Since then, PMARX has accumulated assets of about $67.41 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 4.9%, and it sits 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 12.85%, which places it in the middle 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. Compared to the category average of 10.65%, the standard deviation of PMARX over the past three years is 10.1%. The fund’s standard deviation over the past 5 years is 12.11% compared to the category average of 12.65%. 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. PMARX has a 5-year beta of 0.67, 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. PMARX has generated a negative alpha over the past five years of -4.75, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
