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 Virtus KAR Small Cap Sustain Growth A (PSGAX). PSGAX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
PSGAX finds itself in the Virtus Funds family, based out of Hartford, CT. Virtus KAR Small Cap Sustain Growth A made its debut in June of 2006, and since then, PSGAX has accumulated about $465.35 million in assets, per the most up-to-date date available. The fund is currently managed by Todd Beiley who has been in charge of the fund since April of 2008.
Of course, investors look for strong performance in funds. PSGAX has a 5-year annualized total return of 11.14% and it sits in the top 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 5.47%, which places it in the bottom 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 19.48%, the standard deviation of PSGAX over the past three years is 24.34%. Over the past 5 years, the standard deviation of the fund is 21.47% compared to the category average of 17.21%. This makes the fund more volatile than its peers over the past half-decade.
The fund has a 5-year beta of 0.92, so investors should note that it is hypothetically less volatile than 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. Over the past 5 years, the fund has a positive alpha of 2.82. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, PSGAX is a load fund. It has an expense ratio of 1.34% compared to the category average of 1.20%. Looking at the fund from a cost perspective, PSGAX is actually more expensive than its peers.
While the minimum initial investment for the product is $2,500, investors should also note that each subsequent investment needs to be at least $100.
Overall, Virtus KAR Small Cap Sustain Growth A ( PSGAX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Virtus KAR Small Cap Sustain Growth A ( PSGAX ) looks like a poor potential 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. Zacks provides a full suite of tools to help you analyze your portfolio – both funds and stocks – in the most efficient way possible.