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Is Ivy Small Cap Growth Y (WSCYX) a Strong Mutual Fund Pick Right Now?
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Small Cap Growth fund seekers should not consider taking a look at Ivy Small Cap Growth Y (WSCYX - Free Report) at this time. WSCYX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
WSCYX 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
Ivy Funds is responsible for WSCYX, and the company is based out of Boca Raton, FL. Ivy Small Cap Growth Y made its debut in December of 1995, and since then, WSCYX has accumulated about $141 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. WSCYX has a 5-year annualized total return of 9.8% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 13.17%, which places it in the middle 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, WSCYX's standard deviation comes in at 14.3%, compared to the category average of 9.29%. The fund's standard deviation over the past 5 years is 14.45% compared to the category average of 9.4%. 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. WSCYX lost 49.67% in the most recent bear market and outperformed comparable funds by 3.36%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. WSCYX has a 5-year beta of 1.08, which means it is likely to be more volatile than the market average. 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. WSCYX has generated a negative alpha over the past five years of -1.49, demonstrating that managers in this portfolio find it difficult to pick 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 primarily on equities that are traded in the United States.
This fund is currently holding about 93.84% stock in stocks, and these companies have an average market capitalization of $3.69 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Other
Health
With turnover at about 43%, this fund makes fewer trades than its comparable peers.
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, WSCYX is a no load fund. It has an expense ratio of 1.31% compared to the category average of 1.29%. So, WSCYX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy Small Cap Growth Y ( WSCYX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Ivy Small Cap Growth Y ( WSCYX ) looks like a poor potential choice for investors right now.
Don't stop here for your research on Small Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare WSCYX to its peers 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 Ivy Small Cap Growth Y (WSCYX) a Strong Mutual Fund Pick Right Now?
Small Cap Growth fund seekers should not consider taking a look at Ivy Small Cap Growth Y (WSCYX - Free Report) at this time. WSCYX has a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
WSCYX 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
Ivy Funds is responsible for WSCYX, and the company is based out of Boca Raton, FL. Ivy Small Cap Growth Y made its debut in December of 1995, and since then, WSCYX has accumulated about $141 million in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. WSCYX has a 5-year annualized total return of 9.8% and it sits in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 13.17%, which places it in the middle 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, WSCYX's standard deviation comes in at 14.3%, compared to the category average of 9.29%. The fund's standard deviation over the past 5 years is 14.45% compared to the category average of 9.4%. 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. WSCYX lost 49.67% in the most recent bear market and outperformed comparable funds by 3.36%. This means that the fund could possibly be a better choice than its peers during a down market environment.
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. WSCYX has a 5-year beta of 1.08, which means it is likely to be more volatile than the market average. 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. WSCYX has generated a negative alpha over the past five years of -1.49, demonstrating that managers in this portfolio find it difficult to pick 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 primarily on equities that are traded in the United States.
This fund is currently holding about 93.84% stock in stocks, and these companies have an average market capitalization of $3.69 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Other
- Health
With turnover at about 43%, this fund makes fewer trades than its comparable peers.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, WSCYX is a no load fund. It has an expense ratio of 1.31% compared to the category average of 1.29%. So, WSCYX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Ivy Small Cap Growth Y ( WSCYX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, worse downside risk, and higher fees, Ivy Small Cap Growth Y ( WSCYX ) looks like a poor potential choice for investors right now.
Don't stop here for your research on Small Cap Growth funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare WSCYX to its peers 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.