Is TETON Convertible Securities AAA (WESRX) a Strong Mutual Fund Pick Right Now?

If investors are looking at the Mutual Fund Equity Report fund category, make sure to pass over TETON Convertible Securities AAA (WESRX). WESRX carries a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

TETON is based in Rye, NY, and is the manager of WESRX. The TETON Convertible Securities AAA made its debut in September of 1997 and WESRX has managed to accumulate roughly $5.27 million in assets, as of the most recently available information. The fund’s current manager is a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. WESRX has a 5-year annualized total return of 5.4% and is 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 2.8%, which places it in the bottom 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. WESRX’s standard deviation over the past three years is 16.84% compared to the category average of 16.48%. Looking at the past 5 years, the fund’s standard deviation is 14.3% compared to the category average of 14.38%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.67, so it is likely going to be 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. WESRX’s 5-year performance has produced a negative alpha of -1.87, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For 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, WESRX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1.20%. WESRX is actually cheaper than its peers when you consider factors like cost.

While the minimum initial investment for the product is $1,000, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, TETON Convertible Securities AAA ( WESRX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.

Don’t stop here for your research on Mutual Fund Equity Report funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare WESRX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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