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Is Scout Mid Cap Fund (UMBMX) a Strong Mutual Fund Pick Right Now?
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Mid Cap Growth fund seekers should not consider taking a look at Scout Mid Cap Fund (UMBMX - Free Report) at this time. UMBMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that UMBMX 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
UMBMX is a part of the Eagle Funds family of funds, a company based out of St. Petersburg, FL. Since Scout Mid Cap Fund made its debut in November of 2006, UMBMX has garnered more than $2.63 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.99%, 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 18.16%, 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 11.55%, the standard deviation of UMBMX over the past three years is 9.42%. Over the past 5 years, the standard deviation of the fund is 10.04% compared to the category average of 11.41%. This makes the fund less 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. UMBMX lost 46.03% in the most recent bear market and underperformed its peer group by 5.09%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.91, which means it is hypothetically less 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. UMBMX has generated a positive alpha over the past five years of 0.44, demonstrating 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, UMBMX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 1.20%. So, UMBMX 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, Scout Mid Cap Fund ( UMBMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Scout Mid Cap Fund ( UMBMX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Scout Mid Cap Fund (UMBMX) a Strong Mutual Fund Pick Right Now?
Mid Cap Growth fund seekers should not consider taking a look at Scout Mid Cap Fund (UMBMX - Free Report) at this time. UMBMX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that UMBMX 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
UMBMX is a part of the Eagle Funds family of funds, a company based out of St. Petersburg, FL. Since Scout Mid Cap Fund made its debut in November of 2006, UMBMX has garnered more than $2.63 billion in assets. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 12.99%, 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 18.16%, 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 11.55%, the standard deviation of UMBMX over the past three years is 9.42%. Over the past 5 years, the standard deviation of the fund is 10.04% compared to the category average of 11.41%. This makes the fund less 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. UMBMX lost 46.03% in the most recent bear market and underperformed its peer group by 5.09%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, investors should also note that the fund has a 5-year beta of 0.91, which means it is hypothetically less 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. UMBMX has generated a positive alpha over the past five years of 0.44, demonstrating 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, UMBMX is a no load fund. It has an expense ratio of 0.96% compared to the category average of 1.20%. So, UMBMX 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, Scout Mid Cap Fund ( UMBMX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Scout Mid Cap Fund ( UMBMX ) looks like a somewhat weak choice for investors right now.
For additional information on this product, or to compare it to other mutual funds in the Mid Cap Growth, make sure to go to www.zacks.com/funds/mutual-funds for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.