Is Royce Global Financial Services Service Class (RYFSX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Sector - Finance fund? Well, Royce Global Financial Services Service Class (RYFSX) would not be a good potential starting point right now. RYFSX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
RYFSX is part of the Sector - Finance section, which boasts an array of other possible selections. Sector - Finance funds offer a stable, diversified approach to investing that focuses on the financial industry, an infamously large, complex, and heavily-regulated space. Funds here can include insurance companies and exchanges, as well as banks and investment giants. Investors should note that interest rates may also impact players in this market.
History of Fund/Manager
Royce Funds is based in New York, NY, and is the manager of RYFSX. Royce Global Financial Services Service Class debuted in January of 2004. Since then, RYFSX has accumulated assets of about $34.08 million, according to the most recently available information. The fund's current manager, Charles M. Royce, has been in charge of the fund since January of 2004.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.49%, and it sits in the top 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 12.52%, which places it in the top third during this time-frame.
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 RYFSX over the past three years is 23.07% compared to the category average of 21.07%. The fund's standard deviation over the past 5 years is 18.6% compared to the category average of 17.45%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.12, so investors should note that it is hypothetically more volatile than the market at large. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. The fund has produced a negative alpha over the past 5 years of -3.58, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, RYFSX is a no load fund. It has an expense ratio of 1.49% compared to the category average of 1.54%. So, RYFSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,000, and each subsequent investment should be at least $50.
Bottom Line
Overall, Royce Global Financial Services Service Class ( RYFSX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Sector - Finance area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into RYFSX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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