If investors are looking at the Large Cap Growth fund category, TIAA-CREF Growth & Income Retirement (TRGIX) could be a potential option. TRGIX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
We classify TRGIX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
TIAA-CREF is based in Boston, MA, and is the manager of TRGIX. TIAA-CREF Growth & Income Retirement debuted in December of 2002. Since then, TRGIX has accumulated assets of about $558.58 million, according to the most recently available information. The fund’s current manager, Susan Kempler, has been in charge of the fund since March of 2006.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 15.99%, and is in the middle 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 13.81%, which places it in the middle 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. Over the past three years, TRGIX’s standard deviation comes in at 20.06%, compared to the category average of 15.66%. Looking at the past 5 years, the fund’s standard deviation is 16.1% compared to the category average of 12.9%. This makes the fund more volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.05, so it is likely going to be 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. TRGIX has generated a negative alpha over the past five years of -1.36, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is largely on equities that are traded in the United States.
The mutual fund currently has 82.33% of its holdings in stocks, with an average market capitalization of $391.29 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 76%, which means this fund makes more trades in a given year than the average of comparable funds.
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, TRGIX is a no load fund. It has an expense ratio of 0.66% compared to the category average of 1.02%. From a cost perspective, TRGIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Overall, TIAA-CREF Growth & Income Retirement ( TRGIX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Large Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. And don’t forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.