Small Cap Value fund seekers should not consider taking a look at Aegis Value Fund (AVALX Quick QuoteAVALX - Free Report) at this time. AVALX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

The world of Small Cap Value mutual funds is an area filled with options, such as AVALX. Small Cap Value funds invest in small companies with stock market valuation less than $2 billion. These funds offer more bang for an owner's buck, providing low P/E ratios, high dividend yields, and better-than-average P/S ratios.

History of Fund/Manager

Aegis is based in McLean, VA, and is the manager of AVALX. Since Aegis Value Fund made its debut in June of 2000, AVALX has garnered more than $119.93 million in assets. Scott L. Barbee is the fund's current manager and has held that role since June of 2000.

Performance

Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 2.34%, and is in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 20.14%, 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 11.25%, the standard deviation of AVALX over the past three years is 24.59%. The standard deviation of the fund over the past 5 years is 23.78% compared to the category average of 11.01%. 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 AVALX's case, the fund lost 65.15% in the most recent bear market and outperformed its peer group by 13.96%. This means that the fund could possibly be a better choice than its peers during a down market environment.

Investors should note that the fund has a 5-year beta of 0.58, so it is likely going to be 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. With a negative alpha of -1.73, 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, AVALX is a no load fund. It has an expense ratio of 1.49% compared to the category average of 1.27%. So, AVALX is actually more expensive than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $1 million; each subsequent investment needs to be at least $250.

Bottom Line

Overall, Aegis Value Fund ( AVALX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, worse downside risk, and higher fees, this fund 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 Small Cap Value, make sure to go to www.zacks.com/funds/mutual-funds 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.