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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
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Large Cap Growth fund seekers should consider taking a look at Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) . ALARX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify ALARX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Alger Funds is based in New York, NY, and is the manager of ALARX. Alger Capital Appreciation Institutional Fund I made its debut in November of 1993, and since then, ALARX has accumulated about $2.37 billion in assets, per the most up-to-date date available. Patrick Kelly is the fund's current manager and has held that role since September of 2004.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 17.07%, 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 21.02%, 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 9.76%, the standard deviation of ALARX over the past three years is 11.23%. The standard deviation of the fund over the past 5 years is 11.24% compared to the category average of 9.44%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. ALARX lost 50.11% in the most recent bear market and outperformed its peer group by 1.14%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 1.01, so investors should note that it is hypothetically as volatile as 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 positive alpha of 2.87. This means 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 90.42% of its assets in stocks, which have an average market capitalization of $347.72 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Retail Trade
Finance
Turnover is 58.08%, which means this fund makes more traders than comparable funds in a given year.
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, ALARX is a no load fund. It has an expense ratio of 1.13% compared to the category average of 1.10%. From a cost perspective, ALARX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Alger Capital Appreciation Institutional Fund I ( ALARX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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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Is Alger Capital Appreciation Institutional Fund I (ALARX) a Strong Mutual Fund Pick Right Now?
Large Cap Growth fund seekers should consider taking a look at Alger Capital Appreciation Institutional Fund I (ALARX - Free Report) . ALARX possesses a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We classify ALARX in the Large Cap Growth category, an area rife with potential choices. Large Cap Growth funds invest in many large U.S. companies that are expected to grow much faster compared to other large-cap stocks. To be considered large-cap, companies must have a market cap over $10 billion.
History of Fund/Manager
Alger Funds is based in New York, NY, and is the manager of ALARX. Alger Capital Appreciation Institutional Fund I made its debut in November of 1993, and since then, ALARX has accumulated about $2.37 billion in assets, per the most up-to-date date available. Patrick Kelly is the fund's current manager and has held that role since September of 2004.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 17.07%, 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 21.02%, 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 9.76%, the standard deviation of ALARX over the past three years is 11.23%. The standard deviation of the fund over the past 5 years is 11.24% compared to the category average of 9.44%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. ALARX lost 50.11% in the most recent bear market and outperformed its peer group by 1.14%. This could mean that the fund is a better choice than comparable funds during a bear market.
Even still, the fund has a 5-year beta of 1.01, so investors should note that it is hypothetically as volatile as 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 positive alpha of 2.87. This means 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 mostly on equities that are traded in the United States.
As of the last filing date, the mutual fund has 90.42% of its assets in stocks, which have an average market capitalization of $347.72 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Retail Trade
- Finance
Turnover is 58.08%, which means this fund makes more traders than comparable funds in a given year.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, ALARX is a no load fund. It has an expense ratio of 1.13% compared to the category average of 1.10%. From a cost perspective, ALARX is actually more expensive than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Alger Capital Appreciation Institutional Fund I ( ALARX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and higher fees, Alger Capital Appreciation Institutional Fund I ( ALARX ) looks like a good potential choice for investors right now.
Your research on the Large Cap Growth segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer 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.