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Is ClearBridge Small Cap Growth A (SASMX) a Strong Mutual Fund Pick Right Now?

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

Objective

SASMX 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/Manager

Legg Mason is responsible for SASMX, and the company is based out of Baltimore, MD. Since ClearBridge Small Cap Growth A made its debut in August of 1999, SASMX has garnered more than $858 million in assets. The fund's current manager, Jeffrey J. Russell, has been in charge of the fund since March of 2007.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 14.56%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 21.37%, 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. Compared to the category average of 9.42%, the standard deviation of SASMX over the past three years is 14.6%. Over the past 5 years, the standard deviation of the fund is 14.72% compared to the category average of 9.24%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

One cannot ignore the volatility of this segment, however, as it is always important for investors to remember the downside to any potential investment. In the most recent bear market, SASMX lost 50.47% and underperformed comparable funds by 2.67%. This could mean that the fund is a worse choice than comparable funds during a bear market.

Nevertheless, investors should also note that the fund has a 5-year beta of 1.1, which means it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -0.65. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, SASMX is a load fund. It has an expense ratio of 1.21% compared to the category average of 1.31%. From a cost perspective, SASMX is actually cheaper than its peers.

This fund requires a minimum initial investment of $1,000, and each subsequent investment should be at least $50.

Bottom Line

Overall, ClearBridge Small Cap Growth A ( SASMX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and lower fees, ClearBridge Small Cap Growth A ( SASMX ) looks like a good potential 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 SASMX to its peers as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.


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