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Is PGIM Jennison Mid-Cap Growth A (PEEAX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Mid Cap Growth funds, a place to start could be PGIM Jennison Mid-Cap Growth A (PEEAX - Free Report) . PEEAX holds a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We note that PEEAX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.

History of Fund/Manager

PGIM is based in Providence, RI, and is the manager of PEEAX. PGIM Jennison Mid-Cap Growth A made its debut in December of 1996, and since then, PEEAX has accumulated about $1.10 billion in assets, per the most up-to-date date available. The fund is currently managed by Sheetal Prasad who has been in charge of the fund since January of 2017.

Performance

Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 18.49%, and it sits in the middle 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 21.72%, which places it in the top 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. PEEAX's standard deviation over the past three years is 21.45% compared to the category average of 16.55%. The fund's standard deviation over the past 5 years is 17.18% compared to the category average of 13.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

With a 5-year beta of 1.04, the fund is likely to be more volatile than the market average. 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 0.78. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.

Expenses

Costs 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, PEEAX is a load fund. It has an expense ratio of 1.03% compared to the category average of 1.18%. So, PEEAX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $1,000, investors should also note that each subsequent investment needs to be at least $100.

Bottom Line

Overall, PGIM Jennison Mid-Cap Growth A ( PEEAX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, PGIM Jennison Mid-Cap Growth A ( PEEAX ) looks like a good potential choice for investors right now.

Don't stop here for your research on Mid 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 PEEAX to its peers as well for additional information. If you are more of a stock investor, make sure to also check out our Zacks Rank, and our full suite of tools we have available for novice and professional investors alike.


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