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Is Baron Asset Fund Retail (BARAX) a Strong Mutual Fund Pick Right Now?
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Mid Cap Growth fund seekers should not consider taking a look at Baron Asset Fund Retail (BARAX - Free Report) at this time. BARAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that BARAX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
BARAX is a part of the Baron family of funds, a company based out of New York, NY. Baron Asset Fund Retail made its debut in June of 1987, and since then, BARAX has accumulated about $2.26 billion in assets, per the most up-to-date date available. The fund's current manager, Andrew Peck, has been in charge of the fund since January of 2008.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 13.49%, and is 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 19.84%, 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. The standard deviation of BARAX over the past three years is 13.69% compared to the category average of 10.4%. Over the past 5 years, the standard deviation of the fund is 13.52% compared to the category average of 10.7%. 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. BARAX lost 53.5% in the most recent bear market and underperformed comparable funds by 2.04%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.11, which means it is hypothetically more 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. The fund has produced a positive alpha over the past 5 years of 0.83, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 91.95% of this mutual fund's holdings are stocks, with an average market capitalization of $15.85 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Services
Finance
Industrial Cyclical
Turnover is 9.87%, which means, on average, the fund makes fewer trades than the average comparable fund.
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, BARAX is a no load fund. It has an expense ratio of 1.30% compared to the category average of 1.18%. So, BARAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Baron Asset Fund Retail ( BARAX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Don't stop here for your research on Mid 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 BARAX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Baron Asset Fund Retail (BARAX) a Strong Mutual Fund Pick Right Now?
Mid Cap Growth fund seekers should not consider taking a look at Baron Asset Fund Retail (BARAX - Free Report) at this time. BARAX possesses a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that BARAX is a Mid Cap Growth fund, and this area is also loaded with many different options. Companies are usually considered growth stocks when they consistently report notable sales and/or earnings growth. Thus, Mid Cap Growth funds pick stocks--usually companies with a market cap between $2 billion and $10 billion--that demonstrate extensive growth opportunities for investors compared to their peers.
History of Fund/Manager
BARAX is a part of the Baron family of funds, a company based out of New York, NY. Baron Asset Fund Retail made its debut in June of 1987, and since then, BARAX has accumulated about $2.26 billion in assets, per the most up-to-date date available. The fund's current manager, Andrew Peck, has been in charge of the fund since January of 2008.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 13.49%, and is 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 19.84%, 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. The standard deviation of BARAX over the past three years is 13.69% compared to the category average of 10.4%. Over the past 5 years, the standard deviation of the fund is 13.52% compared to the category average of 10.7%. 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. BARAX lost 53.5% in the most recent bear market and underperformed comparable funds by 2.04%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, investors should also note that the fund has a 5-year beta of 1.11, which means it is hypothetically more 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. The fund has produced a positive alpha over the past 5 years of 0.83, which shows that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
Holdings
Investigating 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.
Right now, 91.95% of this mutual fund's holdings are stocks, with an average market capitalization of $15.85 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Services
- Finance
- Industrial Cyclical
Turnover is 9.87%, which means, on average, the fund makes fewer trades than the average comparable fund.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, BARAX is a no load fund. It has an expense ratio of 1.30% compared to the category average of 1.18%. So, BARAX is actually more expensive than its peers from a cost perspective.
This fund requires a minimum initial investment of $2,000, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Baron Asset Fund Retail ( BARAX ) has a low Zacks Mutual Fund rank, strong performance, average downside risk, and higher fees compared to its peers.
Don't stop here for your research on Mid 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 BARAX to its peers as well for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.