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Is Brown Capital Management Small Company Investor (BCSIX) a Strong Mutual Fund Pick Right Now?
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Small Cap Growth fund seekers should not consider taking a look at Brown Capital Management Small Company Investor (BCSIX - Free Report) at this time. BCSIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as BCSIX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Brown Capital Management is based in Rocky Mount, NC, and is the manager of BCSIX. The Brown Capital Management Small Company Investor made its debut in July of 1992 and BCSIX has managed to accumulate roughly $2.11 billion in assets, as of the most recently available information. 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 in particular has delivered a 5-year annualized total return of 11.76%, and it sits in the top 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 14.42%, 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. Over the past three years, BCSIX's standard deviation comes in at 17.87%, compared to the category average of 11.68%. Over the past 5 years, the standard deviation of the fund is 16.52% compared to the category average of 11.68%. 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. In BCSIX's case, the fund lost 40.91% in the most recent bear market and outperformed its peer group by 12.12%. 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 1.21, so it is likely going to be more volatile than 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. The fund has produced a negative alpha over the past 5 years of -0.75, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 87.61% of its holdings in stocks, which have an average market capitalization of $5.79 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Health
Other
Industrial Cyclical
Turnover is 12%, which means, on average, the fund makes fewer trades than comparable funds.
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, BCSIX is a no load fund. It has an expense ratio of 1.25% compared to the category average of 1.29%. From a cost perspective, BCSIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $5,000 and that each subsequent investment needs to be at $500.
Bottom Line
Overall, Brown Capital Management Small Company Investor ( BCSIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Brown Capital Management Small Company Investor ( BCSIX ) looks like a somewhat weak choice for investors right now.
Want even more information about BCSIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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 Brown Capital Management Small Company Investor (BCSIX) a Strong Mutual Fund Pick Right Now?
Small Cap Growth fund seekers should not consider taking a look at Brown Capital Management Small Company Investor (BCSIX - Free Report) at this time. BCSIX bears a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
The world of Small Cap Growth funds is an area filled with options, such as BCSIX. These funds tend to create their portfolios around stocks that sport large growth opportunities and market capitalization of less than $2 billion. The companies in these portfolios are usually on the smaller side, and are in up-and-coming industries and markets.
History of Fund/Manager
Brown Capital Management is based in Rocky Mount, NC, and is the manager of BCSIX. The Brown Capital Management Small Company Investor made its debut in July of 1992 and BCSIX has managed to accumulate roughly $2.11 billion in assets, as of the most recently available information. 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 in particular has delivered a 5-year annualized total return of 11.76%, and it sits in the top 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 14.42%, 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. Over the past three years, BCSIX's standard deviation comes in at 17.87%, compared to the category average of 11.68%. Over the past 5 years, the standard deviation of the fund is 16.52% compared to the category average of 11.68%. 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. In BCSIX's case, the fund lost 40.91% in the most recent bear market and outperformed its peer group by 12.12%. 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 1.21, so it is likely going to be more volatile than 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. The fund has produced a negative alpha over the past 5 years of -0.75, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Examining 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 largely on equities that are traded in the United States.
The mutual fund currently has 87.61% of its holdings in stocks, which have an average market capitalization of $5.79 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Health
- Other
- Industrial Cyclical
Turnover is 12%, which means, on average, the fund makes fewer trades than comparable funds.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, BCSIX is a no load fund. It has an expense ratio of 1.25% compared to the category average of 1.29%. From a cost perspective, BCSIX is actually cheaper than its peers.
Investors should also note that the minimum initial investment for the product is $5,000 and that each subsequent investment needs to be at $500.
Bottom Line
Overall, Brown Capital Management Small Company Investor ( BCSIX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Brown Capital Management Small Company Investor ( BCSIX ) looks like a somewhat weak choice for investors right now.
Want even more information about BCSIX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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.