If investors are looking at the Sector – Energy fund category, BNY Mellon Natural Resources A (DNLAX) could be a potential option. DNLAX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
We classify DNLAX in the Sector – Energy category, an area that is rife with possible choices. Throughout the massive global energy sector, Sector – Energy mutual funds hold a wide range of quickly changing and vitally important industries. While oil and gas comprise the bulk of the exposure, carbon-based fuels will be the biggest group of assets in these funds, though clean energy is starting to pick up steam.
History of Fund/Manager
BNY Mellon is based in New York, NY, and is the manager of DNLAX. BNY Mellon Natural Resources A debuted in October of 2003. Since then, DNLAX has accumulated assets of about $130.79 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 19.68%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 13.94%, 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. Compared to the category average of 12.72%, the standard deviation of DNLAX over the past three years is 18.88%. Over the past 5 years, the standard deviation of the fund is 24.41% compared to the category average of 14.84%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund’s risk compared to the market as a whole. DNLAX has a 5-year beta of 0.77, which means it is likely to be less volatile than the market average. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a positive alpha of 10.12. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
