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Is Alger Small Cap Focus A (AOFAX) a Strong Mutual Fund Pick Right Now?
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If you've been stuck searching for Small Cap Growth funds, you might want to consider passing on by Alger Small Cap Focus A (AOFAX - Free Report) as a possibility. AOFAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
AOFAX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
AOFAX finds itself in the Alger Funds family, based out of New York, NY. Alger Small Cap Focus A debuted in March of 2008. Since then, AOFAX has accumulated assets of about $128.37 million, according to the most recently available information. The fund is currently managed by Amy Zhang who has been in charge of the fund since February of 2015.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -0.94%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of -14.51%, 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. AOFAX's standard deviation over the past three years is 23.55% compared to the category average of 15.76%. The fund's standard deviation over the past 5 years is 24.24% compared to the category average of 16.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.02, so it is likely going to be as volatile as 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. AOFAX has generated a negative alpha over the past five years of -13.79, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
As of the last filing date, the mutual fund has 82.8% of its assets in stocks, and these companies have an average market capitalization of $5.72 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Health
Other
Non-Durable
This fund's turnover is about 68.04%, so the fund managers are making fewer trades than comparable funds.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, AOFAX is a load fund. It has an expense ratio of 1.48% compared to the category average of 1%. Looking at the fund from a cost perspective, AOFAX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Alger Small Cap Focus A ( AOFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Small 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 AOFAX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.
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Is Alger Small Cap Focus A (AOFAX) a Strong Mutual Fund Pick Right Now?
If you've been stuck searching for Small Cap Growth funds, you might want to consider passing on by Alger Small Cap Focus A (AOFAX - Free Report) as a possibility. AOFAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
AOFAX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
AOFAX finds itself in the Alger Funds family, based out of New York, NY. Alger Small Cap Focus A debuted in March of 2008. Since then, AOFAX has accumulated assets of about $128.37 million, according to the most recently available information. The fund is currently managed by Amy Zhang who has been in charge of the fund since February of 2015.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of -0.94%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3 -year annualized total return of -14.51%, 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. AOFAX's standard deviation over the past three years is 23.55% compared to the category average of 15.76%. The fund's standard deviation over the past 5 years is 24.24% compared to the category average of 16.93%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.02, so it is likely going to be as volatile as 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. AOFAX has generated a negative alpha over the past five years of -13.79, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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.
As of the last filing date, the mutual fund has 82.8% of its assets in stocks, and these companies have an average market capitalization of $5.72 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Health
- Other
- Non-Durable
This fund's turnover is about 68.04%, so the fund managers are making fewer trades than comparable funds.Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, AOFAX is a load fund. It has an expense ratio of 1.48% compared to the category average of 1%. Looking at the fund from a cost perspective, AOFAX is actually more expensive than its peers.
While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $50.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, Alger Small Cap Focus A ( AOFAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund looks like a somewhat weak choice for investors right now.
Don't stop here for your research on Small 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 AOFAX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.