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Is Federated MDT Small Cap Growth Fund A (QASGX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Small Cap Growth fund category, Federated MDT Small Cap Growth Fund A (QASGX - Free Report) could be a potential option. QASGX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
QASGX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
QASGX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. The Federated MDT Small Cap Growth Fund A made its debut in September of 2005 and QASGX has managed to accumulate roughly $87.34 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 17.55%, and is 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 22.19%, 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. QASGX's standard deviation over the past three years is 15.43% compared to the category average of 10.38%. Looking at the past 5 years, the fund's standard deviation is 14.49% compared to the category average of 10.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, QASGX lost 55.53% and outperformed its peer group by 2.4%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.2, which means it is hypothetically more volatile than the market at large. 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 positive alpha over the past 5 years of 0.57, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
The mutual fund currently has 92.79% of its holdings in stocks, and these companies have an average market capitalization of $3.08 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Health
Services
Industrial Cyclical
Turnover is 62%, which means, on average, the fund makes more trades per year than the comparable average.
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, QASGX is a load fund. It has an expense ratio of 1.14% compared to the category average of 1.31%. From a cost perspective, QASGX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Federated MDT Small Cap Growth Fund A ( QASGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Federated MDT Small Cap Growth Fund A ( QASGX ) looks like a good potential choice for investors right now.
This could just be the start of your research on QASGXin the Small Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.
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Is Federated MDT Small Cap Growth Fund A (QASGX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Small Cap Growth fund category, Federated MDT Small Cap Growth Fund A (QASGX - Free Report) could be a potential option. QASGX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
QASGX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
QASGX is a part of the Federated family of funds, a company based out of Pittsburgh, PA. The Federated MDT Small Cap Growth Fund A made its debut in September of 2005 and QASGX has managed to accumulate roughly $87.34 million in assets, as of the most recently available information. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 17.55%, and is 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 22.19%, 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. QASGX's standard deviation over the past three years is 15.43% compared to the category average of 10.38%. Looking at the past 5 years, the fund's standard deviation is 14.49% compared to the category average of 10.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, QASGX lost 55.53% and outperformed its peer group by 2.4%. This makes the fund a possibly better choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.2, which means it is hypothetically more volatile than the market at large. 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 positive alpha over the past 5 years of 0.57, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Exploring 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 principally on equities that are traded in the United States.
The mutual fund currently has 92.79% of its holdings in stocks, and these companies have an average market capitalization of $3.08 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Health
- Services
- Industrial Cyclical
Turnover is 62%, which means, on average, the fund makes more trades per year than the comparable average.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, QASGX is a load fund. It has an expense ratio of 1.14% compared to the category average of 1.31%. From a cost perspective, QASGX is actually cheaper than its peers.
While the minimum initial investment for the product is $1,500, investors should also note that each subsequent investment needs to be at least $100.
Bottom Line
Overall, Federated MDT Small Cap Growth Fund A ( QASGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Federated MDT Small Cap Growth Fund A ( QASGX ) looks like a good potential choice for investors right now.
This could just be the start of your research on QASGXin the Small Cap Growth category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well 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.