There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Alger Capital Appreciation Institutional Fund I (ALARX Quick QuoteALARX - Free Report) . ALARX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

ALARX finds itself in the Alger Funds family, based out of New York, NY. Alger Capital Appreciation Institutional Fund I made its debut in November of 1993, and since then, ALARX has accumulated about $1.57 billion in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.

Performance

Of course, investors look for strong performance in funds. ALARX has a 5-year annualized total return of 8.43% and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 5.59%, 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. Compared to the category average of 18.1%, the standard deviation of ALARX over the past three years is 23.53%. The fund's standard deviation over the past 5 years is 20.84% compared to the category average of 15.98%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

The fund has a 5-year beta of 1.08, so investors should note that it is hypothetically more volatile than the market at large. 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. ALARX has generated a negative alpha over the past five years of -0.91, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

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 primarily on equities that are traded in the United States.

Right now, 99.17% of this mutual fund's holdings are stocks, which have an average market capitalization of $550.73 billion. The fund has the heaviest exposure to the following market sectors:

1. Technology
2. Retail Trade

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, ALARX is a no load fund. It has an expense ratio of 1.15% compared to the category average of 1%. Looking at the fund from a cost perspective, ALARX is actually more expensive than its peers.

This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and higher fees, Alger Capital Appreciation Institutional Fund I ( ALARX ) looks like a somewhat weak choice for investors right now.

For additional information on this product, or to compare it to other mutual funds in the Mutual Fund Equity Report, make sure to go to www.zacks.com/funds/mutual-funds 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.