Is Dodge & Cox Stock Fund (DODGX) a Strong Mutual Fund Pick Right Now?

If you're looking for a Large Cap Value fund category, then a potential option is Dodge & Cox Stock Fund (DODGX). DODGX possesses a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.

Objective

DODGX is classified in the Large Cap Value segment by Zacks, which is an area full of possibilities. Investors interested in a stable income stream find these mutual funds very appealing because they have a unique investing strategy. Large Cap Value funds invest in stocks with a market capitalization of $10 billion or more, but whose share prices do not reflect their intrinsic value. This tactic often leads to low P/E ratios and high dividend yields; however, these funds' high growth opportunities are often slowed, as large-cap securities are generally in stable industries with low to moderate growth prospects.

History of Fund/Manager

Dodge & Cox is responsible for DODGX, and the company is based out of San Francisco, CA. The Dodge & Cox Stock Fund made its debut in December of 1964 and DODGX has managed to accumulate roughly $68.58 billion 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. DODGX has a 5-year annualized total return of 10.39%, and it sits in the bottom third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 14.33%, 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, DODGX's standard deviation comes in at 11.85%, compared to the category average of 11.39%. The standard deviation of the fund over the past 5 years is 15.01% compared to the category average of 13.63%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.8, so it is likely going to be less 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. DODGX's 5-year performance has produced a negative alpha of -0.53, which means 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, DODGX is a no load fund. It has an expense ratio of 0.51% compared to the category average of 0.91%. Looking at the fund from a cost perspective, DODGX is actually cheaper than its peers.

This fund requires a minimum initial investment of $2,500, and each subsequent investment should be at least $100.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, even with its comparatively weak performance, average downside risk, and lower fees, Dodge & Cox Stock Fund ( DODGX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.

Want even more information about DODGX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.

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This article originally published on Zacks Investment Research (zacks.com).

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