Is BlackRock Advantage Small Cap Core A (BDSAX) a Strong Mutual Fund Pick Right Now?

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There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that you should consider investigating is BlackRock Advantage Small Cap Core A (BDSAX). BDSAX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

History of Fund/Manager

BDSAX finds itself in the BlackRock family, based out of New York, NY. BlackRock Advantage Small Cap Core A debuted in June of 2013. Since then, BDSAX has accumulated assets of about $404.13 million, according to the most recently available information. A team of investment professionals is the fund’s current manager.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. BDSAX has a 5-year annualized total return of 10.17% and it sits in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 12.57%, 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. Over the past three years, BDSAX’s standard deviation comes in at 24.48%, compared to the category average of 16.9%. Looking at the past 5 years, the fund’s standard deviation is 21.72% compared to the category average of 14.99%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.2, the fund is likely to be more 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. The fund has produced a negative alpha over the past 5 years of -6.87, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Holdings

Investigating 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.

This fund is currently holding about 98.9% stock in stocks, with an average market capitalization of $4.76 billion. The fund has the heaviest exposure to the following market sectors:

  1. Finance

  2. Technology

  3. Industrial Cyclical

  4. Other

With turnover at about 63%, this fund makes fewer trades than the average comparable fund.

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, BDSAX is a load fund. It has an expense ratio of 0.75% compared to the category average of 1.08%. So, BDSAX is actually cheaper than its peers from a cost perspective.

Investors should also note that the minimum initial investment for the product is $1,000 and that each subsequent investment needs to be at $50.

Bottom Line

Overall, BlackRock Advantage Small Cap Core A ( BDSAX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, worse downside risk, and lower fees, this fund looks like a somewhat average choice for investors right now.

Your research on the Mutual Fund Equity Report segment doesn’t have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.

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