ACCLX: This MCV Not Providing Value To Investors

seekingalpha05-31

Mid-Cap value stocks have historically performed well compared to growth stocks, especially for mid-cap stocks.Mid-Cap value stocks trail only small-cap value stocks in terms of compound annual growth...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nACCLX: This MCV Not Providing Value To Investors\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-05-31 19:30 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4695811-acclx-this-mcv-not-providing-value-to-investors><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Mid-Cap value stocks have historically performed well compared to growth stocks, especially for mid-cap stocks.Mid-Cap value stocks trail only small-cap value stocks in terms of compound annual growth...</p>\n\n<a href=\"https://seekingalpha.com/article/4695811-acclx-this-mcv-not-providing-value-to-investors\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"MDYV","symbol_name":"SPDR S&P 400 Mid Cap Value ETF","start_time":0,"source_url":"https://seekingalpha.com/article/4695811-acclx-this-mcv-not-providing-value-to-investors","article_id":"2439678998","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/1455774438/image_1455774438.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2439678998","pubTimestamp":1717155000,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Mid-Cap value stocks have historically performed well compared to growth stocks, especially for mid-cap stocks.Mid-Cap value stocks trail only small-cap value stocks in terms of compound annual growth","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"MDYV":"SPDR S&P 400 Mid Cap Value ETF","FDN":"First Trust Dow Jones Internet I","BK4588":"碎股","XSVM":"Invesco S&P SmallCap Value with Momentum ETF","VTI":"大盘指数ETF-Vanguard MSCI","BK4550":"红杉资本持仓","MDY":"标普中型股400指数ETF-SPDR","BK4585":"ETF&股票定投概念","AVUV":"Avantis U.S. Small Cap Value ETF","BK4211":"区域性银行","IMCV":"iShares Morningstar Mid-Cap Value ETF","ISBC":"投资者银行","IWS":"罗素中型价值股指数ETF-iShares"},"translate_title":"ACCLX：该MCV没有为投资者提供价值","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AVUV":1,"IMCV":1,"ISBC":1,"IWS":1,"MDY":1,"MDYV":1,"VTI":1,"XSVM":1,"FDN":0.9},"content_text":"Mid-Cap value stocks have historically performed well compared to growth stocks, especially for mid-cap stocks.Mid-Cap value stocks trail only small-cap value stocks in terms of compound annual growth rate and risk ratios.Here I review the American Century Mid Cap Value Fund C using the ACCLX ticker version.The American Century Mid Cap Value Fund C has lagged behind competing ETFs and thus, in this initial review on Seeking Alpha, earns a rare Strong Sell rating from me.   Richard DruryIntroduction While recent history has not favored value stocks over growth stocks, data back to 1972 shows otherwise, especially for Mid-Cap stocks. PortfolioVisualizer.comCompared to the overall US stock market and Mid-Cap Growth stocks, Mid-Cap Value was tops in CAGR, Sharpe and Sortino data. I mention that background as to why Mid-Cap Value ETFs make for a potential Alpha choice alongside a Core Mid-Cap ETF like the SPDR S&P MidCap 400 ETF (MDY). That said, the Mutual Fund reviewed here, the American Century Mid Cap Value Fund C (MUTF:ACCLX) has lagged behind competing ETFs and thus, in this initial review on Seeking Alpha, earns a rare Strong Sell rating from me. Those results are shown in the comparing funds section of this article. American Century Mid Cap Value Fund C review Data by YChartsSeeking Alpha describes this Mutual Fund as: The investment seeks long-term capital growth; income is a secondary consideration. Under normal market conditions, the portfolio managers will invest at least 80% of the fund's net assets in medium size companies. The portfolio managers consider medium size companies to include those whose market capitalizations at the time of purchase are within the capitalization range of the Russell 3000® Index, excluding the largest 100 such companies. Benchmark: Russell Mid Cap Value TR USD. This fund started in early 2004. Source: seekingalpha.com ACCLX There are nine different classes of this mutual fund where the main differences are the purchase, load, and possible exit fees. All the various classes of this fund combined have $8.7b in AUM and this class has a 198bps expense ratio. The TTM yield is 4.43%. Sales within 12 months can incur a 1% redemption fee. American Century adds the following to the fund's purpose: Goal and Strategy: Long-term capital growth and income by investing in the stocks of mid-sized companies that are believed to be undervalued. Distinguishing Characteristics: Seeks higher returns, lower volatility and attractive yields with consistent mid-cap value exposure. Invests in high-quality, mid-sized companies temporarily selling at a discount. Source: res.americancentury.com Holdings review First, we see that the fund invests outside the US.   americancentury.com countriesFinding a full holdings list, the foreign holdings are not ADRs, mostly British PLCs. The Fund does hold currency contracts to offset the risk of owning stocks denominated in GBP or Euros. The current sector weights are as such:   americancentury.com sectorsNotice how little exposure there is to Technology stocks; a plus for investors looking to diversify away from the Magnificent Seven. My usual tool for comparing sectors is restricted to ETFs, so instead I turned to Morningstar for the next table.   morningstar.comOver half the sectors differ from the MCV category by 3% or more. When I looked at the same data for one of the comparison ETFs mentioned later, the drifts were slightly less but still there. As is common with mutual funds, holdings are not as current as ETF reports. These are from the end of March. seekingalpha.comSince these stocks are almost 20% of the positions held, a weight of under 22% indicates the portfolio might use some equal-weighting algorithm. The 25th largest position was still over 1% of the total portfolio. The Fund's Annual Report (3/31/24) does list all the holdings but not individual weights. By holding a limited number of stocks and each having a decent weight, ACCLX is not dependent on a few holdings to drive its performance. The risk is they own the poorer performing MCV stocks within that universe, which seems to be true recently. Distributions review   seekingalpha.com DVDsThe values varied so much that the distributions chart supplied by Seeking Alpha made it look like many payouts were missing. One really has to take the current 4+% yield with a high level of uncertainty in that is what they will receive in any given year. Fund returns comparison For this part, I chose three ETFs with similar investment strategies, those being:  SPDR® S&P 400 Mid Cap Value ETF (MDYV) iShares Morningstar Mid-Cap Value ETF (IMCV) iShares Russell Mid-Cap Value ETF (IWS)  Data starts on 3/1/2010, the earliest available for all four funds. seekingalpha.com chartingAll three competing funds have outpaced ACCLX since the market started recovering from COVID. When looking at selected time periods, we see ACCLX trailing most of the other funds consistently. PortfolioVisualizer.comUsing a style comparison, we can see that despite all being classified as MCV funds, allocations between size and Growth/Value differ greatly in some cases. The IWS ETF currently is invested the closest to the ACCLX MF though with a much higher weight in Growth stock. Note that MDYV is mostly in Small-Cap stocks. advisors.vanguard.com compare fundsThe point here is a name might be masked where the fund is actually invested. Portfolio strategy My US equity strategy has focused on trying to find funds that add Alpha by niche investing to surround the Vanguard Total Stock Market ETF (VTI), which I treat as my \"Core\" US equity fund (article link). The idea is to never trade the Core ETFs and having those at a large percent of my portfolio. This allows me to concentrate my research and due diligence on finding and monitoring the Alpha funds I surround it with. Final thoughts When you look at data back to 1972, Mid-Cap Value only trails Small-Cap Value stocks in CAGR and the risk ratios. PortfolioVisualizer.com Two popular SCV ETFs, the Avantis U.S. Small Cap Value ETF (AVUV) and the Invesco S&P SmallCap Value with Momentum ETF (XSVM), which I compared in my AVUV Vs. XSVM: Active Small-Cap Value ETFs Use Different Strategies article. 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