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Is Boston Partners Small Cap Value II Institutional (BPSIX) a Strong Mutual Fund Pick Right Now?

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If you have been looking for Small Cap Value funds, it would not be wise to start your search with Boston Partners Small Cap Value II Institutional (BPSIX - Free Report) . BPSIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

Zacks categorizes BPSIX as Small Cap Value, which is a segment packed with options. Known for investing in companies with market caps under $2 billion, Small Cap Value mutual funds represent good value because of many things; stocks in these funds offer low P/E ratios, high dividend yields, and better-than-average P/S ratios.

History of Fund/Manager

Robeco is responsible for BPSIX, and the company is based out of New York, NY. Since Boston Partners Small Cap Value II Institutional made its debut in July of 1998, BPSIX has garnered more than $436.64 million in assets. The fund is currently managed by David M. Dabora who has been in charge of the fund since December of 2000.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. BPSIX has a 5-year annualized total return of 5.43% and is in the middle 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 6.48%, which places it in the bottom 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. Over the past three years, BPSIX's standard deviation comes in at 14.58%, compared to the category average of 11.36%. The fund's standard deviation over the past 5 years is 13.61% compared to the category average of 11.26%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. BPSIX lost 51.47% in the most recent bear market and underperformed comparable funds by 0.39%. This makes the fund a possibly worse choice than its peers during a sliding market environment.

Nevertheless, with a 5-year beta of 1.03, the fund is likely to be as volatile as the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. With a negative alpha of -5.29, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

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, BPSIX is a no load fund. It has an expense ratio of 1.10% compared to the category average of 1.27%. From a cost perspective, BPSIX is actually cheaper than its peers.

Investors need to be aware that with this product, the minimum initial investment is $100,000; each subsequent investment needs to be at least $5,000.

Bottom Line

Overall, Boston Partners Small Cap Value II Institutional ( BPSIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Boston Partners Small Cap Value II Institutional ( BPSIX ) looks like a somewhat weak choice for investors right now.

This could just be the start of your research on BPSIXin the Small Cap Value 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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