Is BlackRock Exchange BlackRock (STSEX) a Strong Mutual Fund Pick Right Now?

On the lookout for a Large Cap Growth fund? Starting with BlackRock Exchange BlackRock (STSEX) should not be a possibility at this time. STSEX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.

Objective

STSEX is part of the Large Cap Growth section, and this segment boasts an array of other possible options. Large Cap Growth mutual funds purchase stakes in numerous large U.S. companies that are expected to develop and grow at a faster rate than other large-cap stocks. Companies are usually considered to be large-cap if their market capitalization is over $10 billion.

History of Fund/Manager

BlackRock is based in New York, NY, and is the manager of STSEX. Since BlackRock Exchange BlackRock made its debut in May of 1986, STSEX has garnered more than $270.10 million in assets. The fund's current manager, Sally Du, has been in charge of the fund since November of 2025.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 15.23%, 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 17.39%, 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. The standard deviation of STSEX over the past three years is 9.52% compared to the category average of 12.06%. Over the past 5 years, the standard deviation of the fund is 12.78% compared to the category average of 15.11%. This makes the fund less 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. STSEX has a 5-year beta of 0.76, which means it is likely to be less volatile than the market average. 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. STSEX's 5-year performance has produced a positive alpha of 2.78, which means managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, STSEX is a no load fund. It has an expense ratio of 0.97% compared to the category average of 0.71%. Looking at the fund from a cost perspective, STSEX is actually more expensive 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.

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 strong performance, average downside risk, and higher fees, BlackRock Exchange BlackRock ( STSEX ) has a low Zacks Mutual Fund rank, and therefore looks a poor potential choice for investors right now.

Don't stop here for your research on Large Cap Growth 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 STSEX 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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