Is Alger Small Cap Focus A (AOFAX) a Strong Mutual Fund Pick Right Now?

There are plenty of choices in the Small Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Alger Small Cap Focus A (AOFAX). AOFAX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveAOFAX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.History of Fund/ManagerAlger Funds is based in New York, NY, and is the manager of AOFAX. Alger Small Cap Focus A made its debut in March of 2008, and since then, AOFAX has accumulated about $134.89 million in assets, per the most up-to-date date available. The fund's current manager, Amy Zhang, has been in charge of the fund since February of 2015.PerformanceObviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 1.55%, and it sits in the bottom 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 -6.76%, 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. Compared to the category average of 15.77%, the standard deviation of AOFAX over the past three years is 23.88%. The standard deviation of the fund over the past 5 years is 24.36% compared to the category average of 16.91%. This makes the fund more volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 1.03, 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. Over the past 5 years, the fund has a negative alpha of -11.62. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.HoldingsExamining 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 88.49% in stocks, which have an average market capitalization of $6.23 billion. The fund has the heaviest exposure to the following market sectors: Health Technology With turnover at about 49.48%, this fund is making more traders than comparable funds in a given year.ExpensesCosts are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, AOFAX is a load fund. It has an expense ratio of 1.63% compared to the category average of 1%. AOFAX is actually more expensive than its peers when you consider factors like cost.Investors need to be aware that with this product, the minimum initial investment is $1,000; 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 LineOverall, even with its comparatively weak performance, worse downside risk, and higher fees, Alger Small Cap Focus A ( AOFAX ) has a high Zacks Mutual Fund rank, and therefore looks a good potential choice for investors right now.For additional information on the Small Cap Growth area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into AOFAX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.Free: 5 Stocks to Buy As Infrastructure Spending SoarsTrillions of dollars in Federal funds have been earmarked to repair and upgrade America’s infrastructure. In addition to roads and bridges, this flood of cash will pour into AI data centers, renewable energy sources and more.In, you’ll discover 5 surprising stocks positioned to profit the most from the spending spree that’s just getting started in this space.Download How to Profit from the Trillion-Dollar Infrastructure Boom absolutely free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (AOFAX): Fund Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks